B.N. Sharma & Ors. vs Central Bank Of India & Ors.
1999 Latest Caselaw 959 Del

ORDER

Usha Mehra, J.

1. Petitioners and private respondents 3 to 40 were in the clerical service of Central Bank of India Ltd. (hereinafter called the erstwhile bank) prior to its nationalisation under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (hereinafter called the Act). The erstwhile bank had prescribed four grades for its different categories of employees which were grades 'D, 'C', 'B, and 'A', After the nationalisation of the bank the grades were revised into seven and categorised as grades `G', `F', `E', `D', `C', `B' and `A'. Petitioners 1 to 16 were promoted to Grade `F' (erstwhile Grade `D') i.e. the lowest grade in the officers' cadres as Junior Officers/Sub-Accountants. Rest of the petitioners and respondents were clerical staff. Applications were invited by the bank between 1969 to 1972 from clerical staff for undergoing six months training for the post of Assistant Internal Auditor and Assistant Godwon Inspector. First of such circular as dated 25th June, 1969. It was followed vide circulars dated 27th November, 1971, 24th August, 1972 and 16th October, 1972 respectively. One of the term of the circular was that the person found competent and suitable on the basis of the report received from the Internal Auditor or Godown Inspector would be posted and promoted to work as Assistant to Assistant Internal Auditor or Assistant to Assistant Inspector of Godown, as the case may be, in the bank's officers cadre in future vacancies. The post of Assistant Internal Auditor and that of Assistant Godown Inspector were categorised as Grade ` F'. Petitioners did not apply in response to these circulars. However, respondents did. Respondents Nos. 3, 5, 8 to 20, 26, 28, 31 to 34, 36 and 39 underwent training for Internal Auditor whereas respondents 7, 17, 25, 35, 38 and 40 underwent training for Godown Inspectors. These respondents at the time of their selection were working as clerical staff of the bank . On successful completion of their training they were appointed as Assistant Internal Auditor and Assistant Inspector of Godown. Respondents 4, 5, 21 to 24, 27, 29 and 30, they were direct appointees to the post of Assistant Internal Auditors/ Assistant Godown Inspector.

2. That the respondents after being promoted to Grade 'F' made represen-tations to the bank that they should also be granted and placed in grade 'D'. They pointed out that there was disparity of pay scale between the Internal Auditor selected from amongst Chartered Accountants and those posted after successfully completing the training. They wanted it should be removed. Respondent bank accepted this request of Assistant Internal Auditors and placed them in Grade 'D' and the Assistant Godown Inspectors in Grade 'E' Respondent No. 7 was promoted from Grade 'E' to Grade 'D' effective from date of his promotion to Grade 'F'.

3. Grievance of the petitioners was that in the said circular no mention was made that the clerks who would be promoted to Grade 'F' would get further promotion direct to grade 'D' or 'E' without any interview or passing qualifying test. No other category officer of the bank was able to compete with them for grade 'D' or 'E'. Even while according seniority to Internal Auditors and Godown Inspectors from the date of their initial appointment in Grade 'F', similar treatment was not accorded to other category of officers. Petitioners were not aware of these events nor were made aware of the placements of respondents in higher grade until respondent No. 5 Mr. H.S. Dhingra was made Chief Officer w.e.f. 1st March, 1977 i.e. from Grade 'D' to Grade 'C'.

4. According to petitioners the training by itself could not place the respondents in a separate category nor could confer specialised grade. They were given training simply to acquaint them with the audit work/ godown inspection work. Since petitioners 1 to 16 were already working in Grade 'F' as Junior Officers/Sub-Accountants which was at par, similar and equal in all respects to the post of Internal Auditors hence petitioners 1 to 16 did not apply for the training, even though they were seniors as Clerk as well as in Grade 'F' to that of the respondents and so were other petitioners senior to respondents as clerical cadre. They also did not apply for training because the Bank never held out at any time that the post of Internal Auditor/Godown Inspector would be upgraded or that by merely taking training the respondents would be placed in Grade 'D' or Grade 'E' as the case may be.

5. It was only when Mr. H.S. Dhingra was promoted as Chief Officer that petitioners acquired the knowledge of placement of respondents in higher grade. Accordingly petitioners made representations that they had been discriminated. It had been the case of the petitioners that instead of redressing their grievance the bank formulated New Promotion Policy and Career Path Policy. These policies were prejudicial to the interest of the petitioners. The matter did not end here, the bank further formulated Regulations known as Central Bank of India Officers Regulation, 1979 (hereinafter called Regulation,1979). These Regulations in fact again conferred benefits on the respondents which they had already derived through promotion policies. These policies and Regulation, 1979 have been assailed by the petitioners.

6. Petitioners have also challenged the action of the bank in giving placements/upgradation of grades to Internal Auditors Category 'B' and Godown Inspectors Category 'B' on the grounds, namely: (i) illegal placement in Grade 'D' was regularised and respondents were made eligible for promotion to Grade 'C' on completing four years service as Internal Auditors. (ii) These Internal Auditors were not entitled to reckon their seniority from the date they joined bank's service as Auditor in Grade 'F'. (iii) These Internal Auditors were treated as part of mainstream of bank's officers and would be absorbed in operation in a phased manner.

7. Mr. V.R. Reddy, Senior Advocate, appearing for the bank refuted that Promotion Policies or for that matter Regulation 1979 were arbitrary, discriminatory or illegal. To support his point he drew our attention to Annexure R-6 i.e. Memorandum of Agreement pertaining to Promotion Policy of clerical and subordinate staff and selection of posts carrying special allowance under the bipartite settlement between the Central Bank of India and the All India Employees Federation. This Agreement Mr. V.R. Reddy pointed out was entered into between the Bank and its workers on 30th January, 1970. This agreement thus has a force of law. It being a contract between the employees and the management, therefore, binding on them. Under this agreement the post of Assistant Internal Auditors and Assistant Godown Inspector had been categorised as specialised Cadres. This agreement also provided the eligibility criteria for the post of Assistant Internal Auditors and Assistant Godown Inspectors. That being specialised cadre the respondents' channel of promotion and seniority was different from the non specialised cadre.

8. In order to appreciate the points raised by counsel for the parties, let us have look at the relevant Clauses of this agreement. Clause 11(iv) which is relevant for our purpose reads as under :

Para 11(iv) - under the heading "Assistant Internal Auditors and Assistant Godown Inspectors"

     1.   For  the  post of Assistant  Internal  Auditors,  candidates      should be Graduates or Banking Diploma holders (C.A.I.I.B.)  with at  least 10 years service in the bank or graduate  with  Banking   Diploma (C.A.I.I.B.) with atleast 8 years' service. 
 


     2.   Candidates must have worked in and have a thorough grasp  of      the  routine  work of all the important departments  viz.  Bills,      C/D, Accounts, Overdraft, Loan, Cash, Credit etc. 
 


     3.   For  the post of Assistant Godown Inspector, Godown  Keepers      who  are atleast matriculates having 12 years  completed  service      and  those who are non-matriculates having put 14  years  service      will be eligible to apply. 
 


     4.   Candidates should be between 30 to 45 years of age. 
 


     5.   All  candidates  will have to submit  their  application  in      prescribed  from  through proper channel in  response  to  Bank's      Notice/Circular.  Selection will be made by interview taken by  a      Chief  Agent  along with Chief Internal Auditor  and  one  Senior      Officer from Head Officer. 
 


     6.   Selection  will be made from the application  received  from      bank's officer all over India on the basis of member's length  of      service,  qualifications,  personality  and  performance  in  the      interview. 
 


     7.   Selected  candidates will be given training for 6 months  or      more  but  not exceeding 9 months under an  Internal  Auditor  or      Inspector of Godowns as the case may be, in a zone other than the      one in which they are serving at the time, on the same emoluments      they  are drawing in the clerical grade but will be paid for  the      number of days they are away from Headquarters of the  respective      group, such allowances as may be agreed upon between the  Management and AICBEF from time to time. 
 


     8.   If  after training the member is found quite  competent  and      suitable  on the basis of the reports received from the  Internal      Auditor or Inspector of Godowns with whom he is posted he will be      promoted  to  work  as Assistant Internal  Auditor  or  Assistant      Inspector  of Godowns, as the case may be, in the Bank's  Officer      cadre in future vacancies. 
 


     9.   Selected  members will have to work at any of bank's  office      in India from time to time to suit the exigencies of  administration and will have to give a written undertaking to the effect. 
 


     10.  A candidate will be required to sign a Bond confirming  that  once  he is selected for training in the Audit/Godown  Inspection  work  he  will,  on promotion to Bank's Officers'  cadre  in  his  posting  at  a place of his choice atleast for a period  of  five  years. 
 

9. Reading of Sub Clauses 1 to 10 of Clause 11(iv) of the agreement indicate criteria, qualification and experience and age requirement for eligibility for the appointment to the post of Assistant Internal Auditors and Assistant Inspector of Godown. Clause 11(iv) prescribes that the selection would be made on the basis of length of service, qualification, personality and performance in the interview. The selected candidates were to be given training for six months under an Internal Auditor or Inspector of Godown as the case may be in the zone other than the one in which they were serving at that time. Sub Clauses (8) and (10) of Clause 11(iv) clearly stipulate that after successful training if the incumbent was found competent and suitable he was to be promoted to work as Assistant Internal Auditor or Assistant Inspector of Godown as the case may be in the Bank's Officer cadre in future vacancies. So relying on these provisions of Clause 11(iv) Mr. Reddy contended that the respondents after successful completion of training were to be promoted to the post of Assistant Internal Auditors. The factum of promotion after successful completion of training was known to the petitioners. They inspite of this information did not care to apply for training for the post of Assistant Internal Auditor or Assistant Inspector of Godown. Having intentionally not opted for training they cannot now be allowed to urge that they had been discriminated or deprived to compete with the respondents. They knew that successful candidates would be falling in a separate cadre and that they would be promoted in the Bank's Officer Cadre. In the first circular dated 25th June, 1969 while inviting applications from Clerical Staff the nomenclature of the post was mentioned as Assistant to Assistant Internal Auditors and Assistant to Assistant Inspector of Godown. However, vide circular dated 19th December, 1969 it was clarified to all concerned that the post was in fact Assistant Internal Auditor and Assistant Inspector of Godown. And that the word "to" appearing between Assistant to Assistant Internal Auditors and Assistant to Assistant Inspector of Godown stood deleted. Thereafter also applications were invited from amongst clerical staff for the said training and the post, but the petitioners at no stage cared to apply nor showed any interest in the same. They even did not bother to find out from the bank about the future chances of promotion of those officers who were selected for the training and who were after successful training to be appointed as Assistant Internal Auditors/Assistant Godown Inspectors.

10. From the above narrated position it becomes clear that the petitioners knew by the time applications were invited in 1971-72 that selection to the post of Assistant Internal Auditor and or Assistant Inspector of Godown was a promotional post and that it was a separate specialised cadre. This position emerges from the persual of the terms mentioned in those circulars and of the agreement, which stipulated in no uncertain words that successful candidates after completing the training would be categoriesed specialised cadre meaning thereby that after being appointed as Assistant Internal Auditors or Assistant Inspector Godown they would sever their links with their previous clerical cadre. They were to become a distinct class categorised as specialised cadre. Therefore, placement or upgradation of the posts of specialised cadre had no nexus with the non-specialised cadre. Specialised cadre had different yardsticks of selection and criteria of eligibility. Since the respondents severed their relations with their clerical cadre hence the petitioners could not question nor could claim seniority vis-a-vis the respondents based on the fact that respondents had at one time worked with the petitioner as clerical staff. Their past had no significance nor any relevance once the respondents severed their link with the Clerical Cadre and entered into specialised cadre. They as already pointed out above became a separate entity, a class distinct from Clerical Staff. Petitioners thus could not claim parity with the incumbents of the post of Internal Auditors or Inspector Godown. Merely because at a given point of time petitioners and the respondents were similarly placed i.e. clerical staff by itself would not lead to the conclusion that irrespective of the respondents getting into different cadre, the petitioners would automatically gain the same promotion and compete for seniority with respondents. It will not be correct on the part of the petitioners to urge that the post of Assistant Internal Auditors or Godown Inspector were not covered in specialised cadre. The record of the bank speaks otherwise. These posts ever since 1945 had been termed as specialised cadre. This distinction had been maintained and accepted by the employees of the bank when they signed agreement dated 30th January, 1970. For a specialised cadre there had to have a separate channel of promotion and seniority. Petitioners, therefore, could not have any grievance on this count. We, therefore, find the arguments of Ranjan Mukherjee and for that matter of Mr. Atul Sharma, counsel for the petitioners without substance. These petitioners took conscious decision not to apply for the post of Assistant Internal Auditor or Assistant Inspector of Godown. This fact had been admitted by them through their Association vide its representation made to the bank dated 4th June, 1977. Vide the said representation it was asserted that the Assistant Internal Auditors could be kept in Grade 'E' but not in Grade 'D'. Association accepted that Grade 'E' could rightly be given to respondents because the bank wanted to give some attraction to the Clerks to entice them and lure them to the audit side, to which many were not prepared to join in view of the frequent and continuous touring nature of the job and as such. attraction was extended by giving them Grade'E'. With this backdrop and admission on the part of petitioners that post of Assistant Internal Auditor was onerous, they cannot now be allowed to express any grievance. The bank had granted the respondents Grade 'D' scales keeping in view the onerous duties to be performed by the Internal Auditors and for that matter to Inspector of Godown Grade 'E'. It was in consonance with the duties to be performed by the respondents. In 1975 when the post of Internal Auditor was upgraded to Grade 'D' and that of Inspector of Godown to Grade 'E' respectively. The first representation was made by their Association on h June, 1977 as discussed above. The second was made by the Inspectors of Godown. Inspectors of Godown vide their letter dated 15th December, 1977 represented that they should also be treated at par with Assistant Internal Auditors. This was accepted and they were placed in Grade 'E'. It would not be out of place to mention that the representations made by the Association dated 4th June, 1977 primarily dealt with the promotion of Mr. H.S. Dhingra to the post of Chief Officer. It was only as a passing reference the Association touched the grant of Grade 'D' to non Chartered Accountants promoted as Internal Auditors which according to Association was against bank's own promotional policy and agreement. The Association, however, did not object to the grant of Grade 'E' to those of the respondents who were appointed Assistant Internal Auditors. It was admitted by them that Grade 'E' was granted by the Management in order to attract Clerical Staff to audit side. These petitioners were not prepared to join the training for the post of Assistant Internal Audit in view of the frequent and continuous touring nature of the job. Therefore, now they cannot grudge the placement of the respondents in Internal Auditors to Grade 'D'. Once the respondents joined a separate cadre, the bank had the Authority to change their service canditions which may or may not have been beneficial to them. Post of Internal Auditor was not only different but even its promotion channel was made different. Seniority of the respondents was to be maintained separately being a separate cadre. This was as per the policy of the Bank.

11. We are unable to subscribe to the arguments of counsel for the petitioners that placing of Assistant Internal Auditors in Grade 'D' was against Banks's policies. As already pointed above, Officers in the specialised cadre had a separate channel of promotion. It is evident from the Circular dated 6th December,1978 which deals with promotion policy for officers in the Bank. Para 1.5 of the policy provides as under :-

Para 1.5 - Officers who are designated as specialists would not be eligible for promotion in the normal channel unless otherwise specially provided in this policy, their promotions to the next higher grade will follow a separate channel and they would be promotable in their own specialist line only. However, a process has been laid down in this policy for specialists to join the mainstream of banking at certain stages in their career.

12. Reading of para 1.5 of promotion policy shows that eligibility for promotion of the specialist post was distinct from the normal channel of promotion. Since the post of Internal Auditor and that of the Inspector of Godown was categorised as the specialised cadre, hence had different channel of promotion. Their promotion to the next higher grade had to be as prescribed in para 1.5 quoted above i.e. in their own specialised line. Therefore, when the promotion to grade 'D' of those specialised cadre officers was granted, these petitioners could not have been discriminated nor any of their right violated. Petitioners were in fact in non-specialised cadre, therefore, their asking parity or seniority vis-a-vis the respondents is not sustainable. Keeping in view the onerous nature of respondents job if the Bank allowed higher grade to them, this action of the bank can neither be called arbitrary nor discriminatory. Categorisation of Internal Auditors as specialised cadre and/or granting them higher grade, to our mind, was based on the nature of job to be performed by them. Bank has furnished sufficient justification for the placement of such officers in higher grades. The direct recruit posted as Internal Auditors were treated as specialised cadre and were getting Grade 'D'. There was no justification to deprive the same to the respondents who were performing similar and identical duties. It was in order to avoid two classes of officers in the same cadre and remove anomaly that the bank agreed to place and upgrade the respondents who were appointed after the training at par with the directly recruited Internal Auditors. This was done by the Bank in order to have uniformity of scale and grade in the same class of employees.

13. As far reckoning of seniority of the respondents from the date they came in Grade 'F' is concerned that could also not be called arbitrary. Bank did not discriminate against the petitioners in this regard. For example, petitioners No.1 to 16 seniority was also counted in the general category of Grade 'F' like that of the respondents. This act of the bank of placing both sets of Internal Auditors in the same grade and counting their seniority from that period was neither irrational nor violated or infringed any fundamental rights of the petitioners guaranteeing equality in service matters. It is well settled principle of law that resort to differential treatment in their service can be had for achieving efficiency in the service or for specified objective. Such differential treatment could neither be called mala fide nor unconstitutional.

14. Challenge to promotional policies and framing of Regulations 1979 cannot stand the test laid down by the Apex Court. Supreme Court in the case of V.T Khanzode & Ors. Vs. Reserve Bank of India & Ors., held that power to frame regulation relating to the condition of service of the bank's staff in order to give effect to the provisions of the Act is neither illegal nor unjustified. The power to provide for the service conditions of the staff is incidental to the obligation to carry out the purposes of the bank by acting appropriately in the exercise of its general power of administration and superintendence. No scheme governing service matters 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 fulfillled. But the fact that the Scheme does not satisfy the expectations of every employee does not render it arbitrary, irrational, perverse or mala fide. Similarly in the case of Reserve Bank of India Vs. N.C. Paliwal, the Apex Court observed that it is open to the State to lay down any Rule which it thinks appropriate for determining seniority in service and it is not competent to the Court to strike down such rule on the ground that in its opinion another rule would have been better or more appropriate. The only enquiry which the Court can make is whether the Rule laid down by the State is arbitrary and irrational so that it results in inequality of opportunity amongst employees belonging to the same class. In the case in hand the promotional policies and Regulation 1979 had been framed with a view to rationalise the promotional channel and the seniority. Therefore, such policies and Regulation can neither be called arbitrary nor irrational nor it resulted in inequality of opportunity amongst the same set or class of employees. After the respondents sever their relation with clerical staff and opted for specialised cadre, there was no question of inequality of opportunity between the petitioners and the respondents. Once the respondents joined separate stream they were entitled to have separate seniority which had to be reckoned in their own promotional line and from the stage they came in Grade 'F'. Petitioners, a separate class could not express any grievance because they had no concern with the specialised cadre. Thus placing the respondents in grade 'D' and thereafter regularising them or giving them further promotion in their next higher line cannot be attacked by the petitioners either by calling arbitrary or discriminatory. In fact challenge to seniority of respondents viz-a-viz petitioners by referring to the clerical cadre is wholly irrelevant. Respondents seniority had to be reck-oned from the date of their promotion to the officers cadre. Similarly, the seniority of the petitioners 1 to 16 was also reckoned from the time they came in grade 'F' in their own category. Petitioners, therefore, cannot be allowed to challenge the subsequent promotion or placement of the respondents in their respective channel of promotion as the two channels i.e. General and Specialist were distinct and separate and the twains were never to meet. Even otherwise placement and promotions of officers was an administrative function of the bank. Courts cannot and should not try to administer the same or interfere with the same unless there were strong reasons to do so, but we find none in this case.

15. Finally the challenge to Regulation No.17 of Regulation of 1979 is without merits. Regulation laying down service conditions of the employees of the bank were framed on account of the powers conferred on the bank by Section 19 read with Sub Section (2) of Section 12 of the Act. Regulation of 1979 were framed by the bank with the approval and consent of Reserve Bank of India as well as of the Central Government. Therefore, no legal infirmity can be inferred in the same. Regulation No.17 provides that the promotion to all grades of officers in the bank shall be made in accordance with the policy laid down by the Board of Directors from time to time having regard to the guidelines of the Government, if any. Regulation 17 is thus an enabling provision conferring powers on the bank to frame promotion policies subject to the guidelines of the Government. Vesting of such a power by no means can be arbitrary as it is to be based on the guidelines to be provided by the Government. As pointed out by the respondent bank identical provision as that of Regulation No.17 in fact are operating in all the nationalised banks. Similarly 1978 and 1979 promotional policies were based on the recommendations of the Committees chaired by Shri Laxminarayanan and Shri Pillai. They were appointed with the approval of the Central Government. Their recommendations were followed uniformly by all the banks in the banking industry. Thus framing of Regulation No.17 which is an enabling provision thereby conferring power on the bank subject to the guidelines of the Government can neither be ultravires of Section 12(2) nor of Section 19 of the Act nor can be called arbitrary.

16. In view of the powers vesting in the bank and as per promotional policies granting promotion to officers of specialised grade did not vio-late any right of the petitioners much less Article 14 of the Constitution. We do not find any force in the arguments of Mr. M.K. Mukherjee or of Mr. Atul Sharma that the bank by creating a specialised cadre created a class within the class. As already pointed out above and even at the risk of repetition, it must be stated that Internal Auditors/Godown Inspectors had been a separate class and the bank had been treating them so ever since 1945. Therefore, there was no question of creating a class within the class after formation of promotion policies or Regulation 1979. On the contrary if the Bank had treated differently the Internal Auditors recruited directly and those appointed after the training, it would have amounted to creation of a class within the class. Such an inequality between the same class of employees is not permissible under law. Therefore, on this count also we find no substance in the submission of the petitioners. Respondents took calculated risk in joining training for the post of Internal Auditor but they turned out to be beneficial. For that the petitioners cannot be allowed to seek parity with the respondents nor could attribute mala fide to the Bank. The petitioners in no way have been discriminated. Infact they of their own volition refused to join training because they found job onerous. This admission is apparent from the representation dated 4th June, 1997. Petitioners at no stage represented that they were deprived of opportunity to compete with respondents or alternatively they should also be given opportunity to apply for the training. Having never expressed such a desire they cannot challenge subsequent placement of respondents in Grade 'D' or 'E' as violative of Article 14 of the Constitution. Petitioners' only objection to the placement of the respondents in Grade 'D' was that they should also be given the same grade because they were senior to respondents in Clerical Cadre which is a non-specialised cadre. Refusal by the bank to accede to their demand in view of the above facts cannot be termed arbitrary, illegal or unconstitutional.

17. For the reasons stated above, we find no merits in the petition. Same is accordingly dismissed but with no order as to costs.