- (1.) These Transferred Cases from different High Courts relate to the common question, namely, in the matter of placement of existing officers in the new grades and scale in the State Bank of India made under State Bank of India Officers (Determination of Terms and Conditions of Service) Order 1979, (hereinafter referred to as 'The Service Order'), under Paragraph 7 of the said Order is discriminatory in nature, so far as it deals with the Officers Grade I. The Central Board of the State Bank of India in exercise of power conferred by sub-section (1) of Section 43 of the State Bank of India Act 1955 made the condition of Service Order which came into force with effect from 1-10-1979. Paragraph 7 deals with the placement of the existing officers on the appointed date in the corresponding grades and scale as per the table given in Schedule I and Paragraph 8 deals with the fitment of the said existing officers in the new grade and scale of pay. Prior to coming into force of the condition of Service Order, in the State Bank of India there were different grades of officers in the organisational structure and so also in other Nationalised and Subsidiary Bank. In the year 1973 the Government of India appointed a Committee, called Pillai Committee for bringing uniformity and standardisation in the conditions of service of the officers of various Nationalised Banks. The said recommendations of the Pillai Committee was later on applied to the State Bank of India and its Associate Banks with suitable modification having regard to their special features. So far as the State Bank of India is concerned, the entire re-structuring of its officers was made by passing the conditions of Service Order which came into force on 1-10-1979. Paragraph 6 of the Order deals with categorisation. Paragraph 7 of Order deals with the placement of existing Officer on the appointed date in corresponding grades and scales. Paragraph 8 deals with fitment in the new scales of pay. The aforesaid 3 paragraphs are quoted herein-below in extenso:- "Categorisation 6. (1) Having regard to the responsibilities and functions exercisable, every post of an officer in the Bank shall be categorised by the Central Board or the Executive Committee or the competent authority as falling in any one of the grades or scales mentioned in paragraph 4 and such categorisation may be reviewed from time to time by the Central Board or the Executive Committee or the competent authority. Provided that the categorisation of the posts in existence on the appointed date shall be done before the expiry of two years from that date and shall, in respect of the posts in the senior management and top executive grades, be done by a committee appointed for the purpose by the Chairman of the Bank. (2) For the purpose of categorisation of posts under sub-paragraph (1), every branch or office of the Bank shall be classified by the Bank in accordance with the criteria to be approved by the Central Board or the Executive Committee as small, medium, large, very large or exceptionally large category. Placement of existing officers on the appointed date in corresponding grades and scales. 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 there-against in Column 2 of the said 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. Fitment in the new scales of pay. 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 corresponding to the existing grade and scale as specified in Schedule II to this order. (2) Subject to sub-paragraph (3) on being so fitted 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. (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. (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 provisions of paragraph 7 will not by itself entitle that officer to any higher placement or fitment." In accordance with Paragraph 7 of the Order Schedule I has been drawn up which indicates the grade and scale immediately before the appointed date in which the officer was there and the grade and scale in which he is placed on the appointed date. In the case in hand we are concerned with officers described in Items 8 and 9 of the aforesaid Schedule. The same is extracted herein-below in extenso:- "8 Officers Grade I confirmed as such on or before 31-12-1972 Scale-Rs. 500-40-620-45-755-95-850-50-1050-EB-50-1150-60-1330. Middle Management Scale-II- Rs. 1200-70-1550-75-2000 9. Other Officers Grade I. Scale-Rs. 500-40-620-45-755-95-850-50-1050-EB-50-1150-60-1330. Junior Management Grade Scale I.- Rs. 700-40-900-50-1100-EB-1200-60-1800 and Officers Grade II-Scale Rs. 500-40-620-45-980-50-1030." The grievance of the petitioners, who happened to be the officers of Grade I, prior to the appointed date is that while those of them who had been confirmed before 31-12-1972 they had been placed in th Middle Management Grade Scale II in the scale of Pay of Rs. 1200-2000 while the unconfirmed officers of Grade I prior to 31-12-1972 have been placed in the Junior Management Grade Scale I in the scale of pay of Rs. 700-1800 along with officers of Grade II prior to the appointed date. According to the petitioners, treating the officers confirmed in Grade I before 31-12-1972 differently from other officers of Grade I is a hostile discrimiantion and the so-called classification made on the basis of confirmation made prior to 31-12-1972, with unconfirmed hands is not founded on any intelligible diffentia and further having the cut of date at 31-12-1972 has no rational relation with the object sought to be achieved, and as such, must be held to be arbitrary. According to the employer bank, however, taking into account the period on probation which an officer of Grade I is required to undertake on being recruited, the successful completion of the period of probation, after which an employee is entitled to be confirmed, the guidelines indicated as to the period of service, one must have for holding a post in the Middle Management Scale Grade II and all other germane factors, the decision having been taken on the question of placement, that only those confirmed prior to 31-12-1972 will be placed in MMG Grade Scale II, whereas other should be placed in Junior Management Grade Scale I cannot be held to be arbitrary or irrational.
(2.) Mr. Sanyal, Mr. P. P. Rao and Mr. R. K. Jain, the learned counsel appearing for the petitioners in different sets of Transferred Petitions, raised the following contentions, in assailing the legality of Schedule I, drawn in accordance with paragraph 7 of the Conditions of Service Order, 1979 in relation to Items 8 and 9 quoted earlier in this judgment. (1) In the matter of fitment and placement, bifurcating the officers of erstwhile Grade I, on the basis of their date of confirmations is wholly irrational and further, the date chosen as 31-12-1972 has no basis and is nothing but an arbitrary and capricious exercise of choosing of the date and it has no reasonable nexus with the object sought to be achieved in the matter of placement and, consequently, must be held to be violative of Article 14. (2) Prior to the appointed date on 1-10-1979, the officers of Grade I, having been promoted from the officers of Grade II and subsequent to the appointed date, the very fact of placing some of the officers of Grade I with the officers of Grade II in Junior Management Grade Scale I, is on the face of it, arbitrary and tantamounts to a demotion in case of those, who had already been in Grade I prior to the appointed date and this placement must be held to be arbitrary. (3) In fixing 31-12-1972, as the cut of date, for the purpose of placement and fitment, the same has no reasonable nexus for the differentiation made and at any rate nothing has been indicated by the employer, and, therefore, even if a classification would be permissible, then also such classification would be hit by the provisions of Article 14 of the Constitution. (4) Paragraph 7 of the Conditions of Service Order is subject to the provisions of paragraph 6. Necessarily, therefore, categorisation, having been required to be made in due consideration of the responsibility and functions exercisable, it would not be permissible under paragraph 7 to place officers of Grade I in two different grades, some in Middle Management Grade Scale II and others in Junior Management Grade Scale I inasmuch, it would contravene the mandate engrafted in paragraph 6. (5) Confirmation, being one of the inglorious uncertainties of Government Service, depending neither on efficiency of the incumbent nor on the availability of substantive vacancies, as has been held by this Court in Patwardhan's case, (1977) 3 SCC 399 : (AIR 1977 SC 2051 : 1977 Lab IC 1367) and reaffirmed in the Constitution Bench decision in Direct Recruits case, (1990) 2 SCC 715 : (AIR 1990 SC 1607 : 1990 Lab IC 1304) if such date of confirmation, cannot be the basis for the seniority of the employees in a cadre, there would be no rhyme and reason to have such confirmation as the basis for the placement of the officers when a restructuring takes place and the basis of placement being the inglorious uncertainty of confirmation, the order of placement must be held to be invalid and must be struck down. (6) The Division Bench Judgment of the Andhra Pradesh High Court in case of subsidiary banks as well as the Rajasthan High Court in case of the State Bank of Bikaner, which also is a subsidiary bank, having been upheld by this Court in somewhat similar circumstances and the placement and fitment made in case of subsidiary banks, having been set aside by the High Court, the principles enunciated therein, would apply with equal force to the case in hand, and therefore, the placement of officers of Grade I, those who have not confirmed by 31-12-1972 in the Junior Management Grade Scale I along with the officers of Grade II, must be held to be arbitrary and irrational and must be struck down.
(3.) Mr. Shanti Bhushan and Mr. Kapil Sibal, learned counsel, appearing for the bank, on the other hand contended that Conditions of Service Order, 1979, is a statutory order, made in exercise of powers conferred under sub-section (1) of Section 43 of the State Bank of India Act, 1955 and the said order purports to rationalise and standardise in restructuring the administrative set up of the Management cadres and in process of such restructuring if on consideration of relevant and germane materials, placement of the officers has been made, as provided under paragraph 7 of the Conditions of Service Order, then such placement is not liable to the interfered with by a Court of law, unless a strong case is made out, either on the ground of mala fides or on the ground of infraction of a constituional provision. According to the learned counsel, when officers of a pre-existing Grade are sought to be placed in the different grades, which emanated on account of standardisation and re-structuring, then it may not be possible in a given situation to put all the officers of a particular grade to be placed in a corresponding grade or scale of pay evolved in the process of restructuring. This being the position, while grafting of these officers in the newly created grade and scale, if there is a bifurcation of officers of a particulars grade into two, based on their period of service, experience and other relevant factors, such bifurcation would not tantamount to treating them (sic) officers, on the basis of the responsibilities and functions exercisable by such officers whereas paragraph 7 deals with the placement and paragraph 8 deals with the fitment in the new scale of pay and this being the position, notwithstanding paragraph 7 is subject to paragraph 6, there would be no bar in bifurcating the officers of a particular grade and placing them in two different grades, as has been done in the present case, if there is any reasonable basis for such bifurcation. According to the learned counsel, the provision for confirmation, contained in paragraph 16 would not attract the mischief of inglorious uncertainty of confirmation in the service and on the other hand, it is the satisfactory completion of training of the officers, which is determinative of the confirmation in service and failure on the part of the officer, who is not found fit for confirmation by the Competent Authority, would entail termination of service in case of a direct appointee and reversion to the substantive grade in case of a promotee. This being the position with regard to confirmation, the ratio in Patwardhan's case as well as Direct Recruits case (AIR 1990 SC 1607 : 1990 Lab IC 1304) on which reliance has been placed by the counsel, appearing for the petitioners, would have no application at all. According to Mr. Shanti Bhushan, the judgment of this Court in Tarsem Lal Gautam v. State Bank of Patiala, (1989) 1 SCC 182 : (AIR 1989 SC 30 : 1989 Lab IC 1138) fully governs the present batch of cases and as such, there is no infirmity with the classification that has been made amongst the officers of Grade I on the basis of their date of confirmation, whether prior to 31-12-1972 or thereafter. Mr. Sibal, further urged that it would be a sound and wise exercise of discretion for the Courts to refuse to exercise their extraordinary powers under Article 226 in the case of persons who do not approach the Court expeditiously for relief and who stand by and allow things to happen and then approach the Court to put forward stale claims and try to unsettle settled matters and in the case in hand, the placement that was made in the year 1979 is now sought to be assailed in writ petition filed in different High Courts, the earliest being in the year 1988 and the latest being in the year 1998 and such delay in approaching the Court disentitles the petitioners from invoking the extraordinary jurisdiction of the Court under Article 226 of the Constitution, and, therefore, these petitions are liable to be dismissed. In support of this contention, reliance was placed on the decision of this Court in the case of P.S. Sadasivaswamy v. State of Tamil Nadu, (1975) 1 SCC 152 : (AIR 1974 SC 2271 : 1974 Lab IC 1431). Before we deal with the respective contentions of the parties it would be appropriate for us to notice that what Article 14 prohibits is class legislation and not reasonable classification for the purpose of legislation. If the rule Making Authority takes care to reasonably classify persons for a particular purpose and if it deals equally with all persons belonging to a well defined class then it would not be open to the charge of discrimination. But to pass the test of permissible classification two conditions must be fulfilled:- (a) that the classification must be founded on an intelligible differentia which distinguishes persons or things which are grouped together from others left out of the group; and (b) that the differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different basis and what is necessary is that there must be a nexus between the basis of classification and the object under consideration. Article 14 of the Constitution does not insist that the classification should be scientifically perfect and a Court would not interfere unless the alleged classification results in apparent inequality. When a law is challenged to be discriminatory essentially on the ground that it denies equal treatment or protection, the question for determination by Court is not whether it has resulted in inquality but whether there is some difference which bears a just and reasonable relation to the object of legislation. Mere differentiation does not per se amount to discrimination within the inhibition of the equal protection clause. To attract the operation of the clause it is necessary to show that the selection or differentiation is unreasonable or arbitrary; that it does not rest on any rational basis having regard to the object which the legislature has in view. If a law deals with members of well defined class then it is not obnoxious and it is not open to the charge of denial of equal protection on the ground that it has no application to other persons. It is for the Rule Making Authority to determine what categories of persons would embrace within the scope of the rule and merely because some categories which would stand on the same footing as those which are covered by the rule are left out would not render the Rule or the Law enacted in any manner discriminatory and violative of Article 14. It is not possible to exhaust the circumstances or criteria which may afford a reasonable basis for classification in all cases. It depends on the object of the legislation, and what it really seeks to achieve.;