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CASE NO.:

Appeal (civil) 2218 of 1999.

Appeal (civil) 2219 of 1999

Transfer Case (civil) 403 of 1999

PETITIONER:

SOUTH MALABAR GRAMIN BANK

Vs.

RESPONDENT:

CO-ORD.COMMITTEE OF S.M.G.B. EMP.UNION & ORS.

DATE OF JUDGMENT: 31/01/2001

BENCH:

G.B.Pattanaik, B.N.Agarwal

JUDGMENT:

L.....I.........T.......T.......T.......T.......T.......T..J

JUDGMENT

PATTANAIK,J.

South Malabar Gramin Bank and the Union of India, have

filed two civil appeals against the judgment of the Kerala

High Court dated 25.11.1998. The Division Bench of Kerala

High Court by the impugned judgment, dismissed the appeals

filed against the judgment of the learned Single Judge and

held that the Central Government having accepted the NIT

Award as well as the report of the Equation Committee and

having given effect to the 5th Bipartite Settlement between

the employees of the sponsor bank and the management, the

employees and officers of the Regional Rural Banks ipso

facto would be entitled to the revision of their wages, as

and when the wages of the sponsor bank employees get

revised, pursuant to Bipartite Settlement and, therefore the

subsequent Bipartite Settlements, namely the 6th and 7th

Bipartite Settlements should be given effect to revise the

pay structure of the officers and employees of the Regional

Rural Banks also. In these appeals, apart from the

respondents, who had filed the writ petition in Kerala High

Court, namely Co-ordination Committee of South Malabar

Gramin Bank Employees Union, All India Regional Rural Bank

Employees Association, who had filed the writ petition in

the Karnataka High Court had applied for intervention, All

India Regional Rural Bank Officers Federation, who happen to

be the petitioner in Transfer Petition No. 403/99, All

India Gramin Bank Workers Organisation, who had filed a writ

petition in this Court, under Article 32 wherein order has

been passed that writ petition would come after disposal of

the civil appeals, had made their respective submissions

through different counsel, all the respondents having

supported the judgment of the learned Single Judge of Kerala

High Court, as upheld in appeal by the Division Bench. It

may be noticed at this stage that the similar question had

been raised before the Calcutta High Court and a learned

Single Judge of the Calcutta High Court had dismissed those

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writ petitions by judgment dated 5.9.95 in C.O. No.

12653/95 and C.O. No.12869/95 and the appeal against the

same before the Division Bench is pending. In the Karnataka

High Court writ petition No. 17905/97 had been filed by All

India Regional Rural Bank Employees Association and that

writ petition stood disposed of by judgment dated 11th of

November, 1998. The High Court allowed the writ petition,

quashed the appointment of the Committee as well as its

Report dated 17th May, 1997 and issued directions to pay

salary and allowances to all the employees of Regional Rural

Banks w.e.f. 1.11.1992 in accordance with the pay and

allowances and benefits implemented in respect of the

employees of Nationalised Commercial Banks as per the

Memorandum of Settlement dated 14.2.1995 and as per the wage

revision given to those officers of the Nationalised

Commercial Banks from 1.11.92 and 1.7.1993. Against the

said judgment, an appeal filed before the Division Bench is

pending.

Writ Petitions under Article 32 of the Constitution

had been filed in 1982 and 1994 in the Supreme Court,

challenging the validity of Section 17 of the Regional Rural

Banks Act, 1976 (hereinafter referred to as the Act) on

the ground that the provision of Section 17 is ultra vires

of Articles 14 and 16 of the Constitution. The writ

petitions had been filed by All India Gramin Bank Workers

Association and by All India Regional Rural Bank Employees

Association. The employees of the Rural Banks had all along

been making a grievance that in the matter of their pay

structure, they are entitled to get the same scale of pay,

as is available to the employees of rural banks of different

nationalised commercial banks. But since the Government did

not meet their demand, they filed the writ petitions under

Article 32, as stated earlier. It was prayed in the writ

petitions that Section 17 of the Regional Rural Banks Act,

be struck down, as being ultra vires of Articles 14 and

16(1) of the Constitution and writ in the nature of mandamus

be issued directing the Union of India to fix the emoluments

of the Regional Rural Bank Employees in conformity with the

judicial maxim of Equal pay for equal work and

industry-cum-region formula and bring about parity in

emoluments between the employees of Regional Rural Banks

inter se and employees of the Nationalised Commercial Banks.

While these writ petitions were being heard in the Supreme

Court, the Government of India agreed to appoint a National

Industrial Tribunal to decide the question relating to pay,

salary, other allowances and other benefits payable to the

employees of the Regional Rural Banks constituted under the

Regional Rural Banks Act, 1976 and the counsel for the

petitioners also agreed that a reference may be made to the

proposed tribunal. This Court, therefore left all the

contentions open and directed the Central Government to

refer the dispute to the tribunal, preferably to a retired

Chief Justice of a High Court, who will pronounce its award

as expeditiously as possible. In terms of the aforesaid

orders of this Court, the Central Government appointed

Justice S.Obul Reddi, retired Chief Justice of High Court of

Andhra Pradesh as Chairman of National Industrial Tribunal

and referred the disputes to the said tribunal. The

Notification, appointing the tribunal stated that the

decisions of the tribunal will be final and binding. The

tribunal thus appointed, passed an award after elaborate

discussion of the materials placed before it. The ultimate

directions of the tribunal were that officers and employees

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of the Regional Rural Banks will be entitled to claim parity

with the officers and other employees of the sponsor banks

in the matter of pay scale, allowances and other benefits

and the tribunal further directed that the aforesaid award

should be given effect to with effect from 1st September,

1987. With regard to equation of posts and consequent

fixation of the new scales of pay, allowances and other

benefits for officers and employees of the Regional Rural

Banks at par with the officers and other employees of the

comparable level in corresponding posts in sponsor banks and

their fitment into the new scales of pay as are applicable

to officers of sponsor banks, the tribunal held that it is a

matter which has to be decided by the Central Government in

consultation with such authorities as it may consider

necessary and the award, according to the tribunal will

cover all the existing Regional Rural Banks. By 1st of

September, 1987, the employees of the nationalised

commercial banks were getting their pay scales on the basis

of 5th Bipartite Settlement and by implementation of the

award of Justice S. Obul Reddi, the employees of the

Regional Rural Banks were also given the benefit of the said

5th Bipartite Settlement on the basis of which the pay

structure of the Nationalised Commercial Banks had been

determined. Thereafter, when pay structure of the employees

of the Nationalised Commercial Banks were further revised in

1992 and 1997 by means of 6th and 7th Bipartite Settlements,

as there was no corresponding revision of the pay structure

of the employees of the Regional Rural Banks, the present

litigation started which had ultimately culminated in filing

of these appeals, one by Union of India and the other by the

South Malabar Gramin Bank Management. Before the High

Court, the Bank took the stand that it is the Government of

India, who has to determine the salary of employees of

Regional Rural Banks in terms of Section 17 of the Regional

Rural Banks Act, 1976 and on the basis of the revised pay

structure of the Nationalised Commercial Bank Employees,

pursuant to 6th and 7th Bipartite Settlements, the employees

of the Regional Rural Banks ipso facto cannot get their pay

structure changed. It was also stated that in fact the

Reserve Bank of India had appointed S.C. Mahalik Committee

to examine the pay structure of the employees of the

Regional Rural Banks and to suggest changes therein. The

learned Single Judge of the High Court came to the

conclusion that by the decision of the Government of India

dated 22nd February, 1991 implemented the award of Justice

S.Obul Reddi and thereby extended the benefits of 4th and

5th Bipartite Settlements and on principle having accepted

the same, further consideration by the Government of India

or any order by the Government of India is not necessary for

extending the benefits of the subsequent Bipartite

Settlements to the employees and officers of the Regional

Rural Banks and accordingly, the impugned direction was

issued, which was upheld in appeal by the Division Bench.

Mr. P.P.Rao, the learned senior counsel, appearing

for the South Malabar Gramin Bank, contended before us that

under the provisions of the Act, more particularly under

second proviso to Section 17(1) of the Act, it is only the

Central Government, who has been conferred with the power to

determine the remuneration of the officers and employees

appointed by the Regional Rural Bank and for determining

such remuneration, the legislature has also indicated the

guidelines and this being the position the question of

giving effect to any Bipartite settlement arrived at between

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the employees of the Nationalised Commercial Banks and the

Government ipso facto to the remuneration structure of the

officers and employees appointed by the Regional Rural Bank

does not arise. According to Mr. Rao, when the grievances

and the anomalies that existed prior to the appointment of

Justice S. Obul Reddi Tribunal were focussed before the

tribunal and the employees claimed the applicability of

equal pay for equal work, the tribunal in no uncertain

terms held that the said principle cannot be made applicable

and yet the tribunal held that the employees of the Regional

Rural Bank are entitled to claim parity with the pay

structure of the employees of the Nationalised Commercial

Banks and in fact, directed implementation of the pay

structure of the employees of the Nationalised Commercial

Banks, as it stood then in the year 1987, which had been

obtained on the basis of the 4th and 5th Bipartite

Settlements and the Government of India did implement the

said award. But neither the award anywhere indicated that

all subsequent pay revision of the employees of the

Nationalised Commercial Banks would pro tanto be given

effect to for determining the pay structure of the employees

of the Regional Rural Banks, nor such a direction could be

given in law as that would be contrary to the plain language

of the second proviso to Sub-section(1) of Section 17 of the

Act and that would tantamount to usurping the jurisdiction

of the Central Government. According to Mr. Rao, the

expression parity would not necessarily mean the same pay

structure and therefore, the question of pay revision of the

Regional Rural Bank employees will have to be re-determined

by the Central Government in accordance with the guidelines

stipulated in the second proviso to Sub-section(1) of

Section 17 and that in making such determination, the

existing pay structure of the Nationalised commercial Banks

on the basis of any subsequent Bipartite settlement would be

undoubtedly a relevant factor for the Central Government in

arriving at a conclusion. Mr. Salve, the learned solicitor

General, appearing for the Union of India and Mr. P.P.Rao,

appearing for the Bank contended with vehemence that the

financial condition of the Regional Rural Banks is not that

affluent so as to enable the management to offer the pay

structure, as is available to the employees of the

Nationalised Commercial Banks and in determining the pay

structure of the employees, the financial capacity as well

as the performance of the Bank cannot be totally ignored,

rather the same should also be a germane factor in the

matter of determination. According to Mr. Rao, the

revision of pay scales being a periodic exercise in all

spheres of public employment and the Act having conferred

the power on the Union government by virtue of the second

proviso to Section 17(1) of the Regional Rural Banks Act,

1976, it would be for the Central Government to exercise

that power at reasonable intervals, depending upon the

circumstances of the case and then come to a conclusion on

consideration of all germane factors, as to what would be

the pay structure of the employees of the Regional Rural

Banks. Mr. Rao also submitted that the legislature having

clearly indicated by use of the expression shall have due

regard to in the second proviso to Sub- section(1) of

Section 17, it would be obligatory for the Central

Government to find out the pay scales of the employees of

local authorities as well as the notified area of comparable

level and status, and in this view of the matter, if the

contention of the employees is accepted, as has been

accepted by the High Court of Kerala, it would tantamount to

going against the legislative provision and such a

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construction is not permissible. Mr. Rao, very strenuously

contended that the findings arrived at by the tribunal

itself would indicate that the tribunal never intended that

as and when the pay structure of the employees of the

Nationalised Commercial Banks is changed on the basis of any

Bipartite Settlement, the same should ipso facto get

reflected by revising the pay structure of the employees of

the Regional Rural Banks and in this view of the matter, the

High Court of Kerala committed serious error in issuing the

impugned directions. Mr. Rao, the learned senior counsel

further contended that the Regional Rural Banks are separate

statutory entities managed by separate statutory Board of

Directors subject to statutory controls by the Reserve Bank

of India and the Govt. of India. On the aforesaid premises

on principle, it cannot be held that the employees of the

Regional Rural Banks are entitled to the same scales of pay,

as are available to the employees of the sponsored banks

under bipartite settlements, without any further

determination by the Govt. of India or the Reserve Bank of

India. According to the learned counsel, the bipartite

settlements ordinarily bind the employers and employees who

are parties to the same. Since the Regional Rural Banks nor

their employees were parties to such settlements, they

cannot claim any benefit under the settlements in question.

According to Mr. Rao, revision of wage structure of the

employees of the Regional Rural Banks will have to be

undertaken by the Govt. of India in accordance with the

statutory provisions contained in Section 17 of the Act and

the Court can issue mandamus to the Central Government for

exercise of power under Section 17, if the said power has

not been exercised and in this view of the matter, the

Kerala High Court was wholly unjustified in directing the

pay revision of the employees, on the basis of bipartite

settlements arrived at and given effect to, in respect of

the employees of the nationalised commercial bank.

Mr. DD.Thakur, appearing for Respondents 1 to 3 in

C.A. No. 2218-2219/99, contended before us that the facts

leading to the appointment of Justice Obul Reddi, as a

National Tribunal to decide the dispute between the

employees and management of the Regional Rural Banks,

unequivocally indicates that the dispute related to pay,

salary, other allowances and other benefits payable to the

employees of the Regional Rural Banks. The said tribunal

having considered the dispute raised and having determined

the same and that determination having been given effect to

by allowing the pay structure of the employees of the

nationalised commercial banks as it stood on the date of the

acceptance of the recommendations of the award of Justice

Obul Reddi, it is only logical that as and when the pay

structure of the employees of the nationalised commercial

banks get changed, the same must be given effect to in

respect of the employees of the Regional Rural Banks.

According to Mr. Thakur, Obul Reddi Tribunal having held

that the employees of the Regional Rural Banks are entitled

to claim parity with the employees of the nationalised

commercial banks in the matter of pay structure, if there is

no pay revision of the employees of the Regional Rural banks

notwithstanding such revision in case of employees of the

nationalised commercial banks, the decision of the tribunal

to maintain parity would be meaningless and the finality to

the said decision of the tribunal becomes meaningless.

Consequently, even if the Central Government is required to

exercise its power under proviso to Sub-section(1) of

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Section 17, then the same is a mere clerical act in

implementation of the finally resolved dispute by award of

Justice Obul Reddi tribunal and adjudged from this stand

point, the High Court was fully justified in issuing the

impugned direction. Mr. Thakur also contended that the

power of the Central Government under proviso 2 to

Sub-section(1) of Section 17 must be held to have got

exhausted on the date the Central Government accepted the

award of Justice Obul Reddi and question of re-determining

the remuneration of the employees of the Regional Rural

Banks would not arise, since they are entitled to a parity

with the remuneration paid to the employees of the

nationalised commercial banks. Mr. Thakur also urged that

in giving effect to the award of the tribunal and in

maintaining the parity between the employees of the RRBs

with the employees of the nationalised commercial banks, so

far as their remuneration is concerned, there can hardly be

any justification to restrict the parity, only for a limited

period proximate to the date of the award and not after

that. It is contended by Shri Thakur that the parity must

be maintained for all times to come and necessarily,

therefore, as and when the remuneration of the employees of

the commercial banks is revised, pursuant to any settlement

between the employees and the management of such banks, the

appropriate authority must give effect to the same, so far

as the employees of the Regional Rural Banks are concerned.

Mr. Thakur urged that in fact by Government order dated

22nd February, 1991, the bipartite settlement between the

management and employees of the nationalised commercial

banks, so far as their pay, allowances and other benefits

are concerned, was given effect to and extended to the

employees/officers of the Regional Rural Banks and

therefore, there is no justification for not giving effect

to the subsequent bipartite settlement between the employees

and management of nationalised commercial banks on the basis

of which the pay structure stood revised for the employees

of the commercial banks. Mr. Thakur also contended that

the financial capacity as well as the performance of the

Regional Rural Banks had been placed before Justice Obul

Reddi Tribunal, but the tribunal positively came to the

conclusion that the said financial capacity cannot be a

germane factor in determining the pay structure of the

employees of the Regional Rural Banks and then decided that

there should be a parity between the employees of the

nationalised commercial banks and the employees of the

Regional Rural Banks. This being the position, it is futile

for the employer-management as well as the Govt. of India

to contend that the pay structure of the employees of the

Regional Rural Banks could be revised only after due

consideration by the Govt. of India under proviso to

Sub-section(1) of Section 17 and after passing of any order

thereunder. According to Mr. Thakur, such view of the

matter would keep the dispute pending notwithstanding the

resolve of the dispute by a tribunal appointed by the Govt.

of India itself and notwithstanding the fact that the

Government of India and the employer- management did accept

the recommendations of the tribunal and gave effect to the

said decision.

Mr. S.K. Dholakia, the learned senior counsel,

appearing for the petitioners in Transfer Petition No.

403/99, filed on behalf of All India Regional Rural Bank

Officers Federation, contended that the lack of funds or

resources of the employer-Regional Rural Banks will not in

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any way affect the constitutional rights of the employees of

such rural banks enshrined under Article 14 of the

Constitution of India. According to Mr. Dholakia, the

determination of Obul Reddi tribunal to maintain parity

between the employees of the commercial banks and the

employees of the Regional Rural Banks is nothing but a

decision to give equal treatment to the employees of both

the organisations and, therefore, any treatment by the

employer to the employees of the Regional Rural Banks which

make them unequal with the employees of the nationalised

commercial banks would violate the provisions of Article 14

and would be discriminatory in nature. Mr. Dholakia also

contended that the object of constituting Regional Rural

Banks under the statute was not profit making but to develop

rural economy and therefore, the contention of Mr. Rao that

the financial resources is a vital consideration, cannot be

accepted. According to Mr. Dholakia, the award of Obul

Reddi on the basis of 4th and 5th bipartite settlements

entered into between the employees and employer of the

nationalised commercial banks is merely an index for

maintaining parity and that being the position as and when

subsequent bipartite settlements are entered into by the

employees and the employer of the commercial banks, the same

must be given effect to in determining the pay structure of

the employees of the Regional Rural Banks, so that parity

could be maintained. In refuting the dismal picture of the

Regional Rural Banks placed by the learned Solicitor

General, Mr. Dholakia placed before us the report of the

Reserve Bank of India which according to him gives a

contrary picture.

Mr. D.A. Dave, the learned senior counsel appearing

for All India Regional Rural Bank Employees Association-

intervenor, submitted that the failure of the nationalised

commercial banks and the State Bank of India in fulfilling

their obligation in the field of rural banking resulted in

the establishment of the Regional Rural Banks. Such

Regional Rural Banks have in fact taken over the function of

the rural branches of the nationalised commercial banks.

The Parliament enacted the Act for constitution of Regional

Rural Banks to augment the rural economy. When the

employees of such Regional Rural Banks had approached this

Court by filing petition under Article 32, voicing a

grievance with regard to their salary structure and

remuneration and claiming equal pay for equal work and

industry-cum- region formula basis and wanted a writ of

mandamus to the Union of India, the Central Government

itself chose to appoint a tribunal, who was none else than a

Chief Justice of a High Court and the Government itself

decided that the decision of such tribunal would be final

and binding on the parties, with the obvious object that the

controversies would be resolved once for all. This is

apparent from para 1.01 of the award of Justice Obul Reddi.

The very nature of the dispute was such that it cannot be

limited to any specified period and on the other hand, it

must be for all times to come. This being the position and

the tribunal having considered the grievances of the parties

and the respective stand of the parties for over a period of

two and a half years and having given its findings and

holding that the employees of the Regional Rural Banks are

entitled to claim parity with the employees of the

nationalised commercial banks, it would be a travesty of

justice, if such parity is maintained on the date of

acceptance of the award and not thereafter. According to

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Mr. Dave, having regard to the findings arrived at by

Justice Obul Reddi, and the ultimate conclusion that the

employees of the Regional Rural Banks are entitled to claim

parity with the employees of the nationalised commercial

banks w.e.f. 1.9.1987 onwards, the date on which the

Supreme Court disposed of the writ petition by appointing

the tribunal and the Central Government having accepted the

same and giving effect to the same after appointing the

Equation Committee for equation of posts and thereafter,

extending the benefits of the pay structure which the

nationalised commercial banks had received under the 4th and

5th bipartite settlements to the Regional Rural Banks

employees, there cannot be any manner of doubt that the

employees of the Regional Rural Banks would be entitled to

the effect of the 6th and the 7th bipartite settlements

arrived at between the employees and the employer of the

nationalised commercial banks and the High Court of Kerala

rightly allowed the relief sought for. According to Mr.

Dave, that an award of an industrial tribunal and the

obligations arising out of an award remains binding and

continue to be binding on the parties which can be replaced

only by a subsequent award or a settlement and that being

the position, there is no other alternative for the

management of the Regional Rural Banks as well as the

Government of India to give effect to the 6th and 7th

bipartite settlements on the basis of which the pay

structure of the employees of the nationalised commercial

banks stood revised to maintain the parity in terms of the

award of Justice Obul Reddi and such decision of the

tribunal(Justice Obul Reddi) cannot be whittled down by an

executive order of the Central Government. According to Mr.

Dave, the claim of the Union Government, as reflected

through the submissions of the learned Solicitor General on

the basis of financial constraint and current economic

policy is nothing but a colourable exercise of power and is

not available to be urged in view of the findings of Obul

Reddi Tribunal. In fact the tribunal itself considered the

alleged ground of incapacity to pay and negatived the same

while granting parity in the matter of emoluments between

the employees of the Regional Rural Banks and the employees

of the nationalised commercial banks. Any method or

contraviance, according to Mr. Dave for non-maintaining the

parity at any point of time would grossly violate the

decision of the tribunal and as such cannot be sustained by

this Court. Mr. Dave also contended that the dispute

having been resolved by an adjudication of a tribunal, the

issue may not be allowed to be re-opened, unless there is

material change in the circumstances and in fact there has

been no change in the circumstances. Mr. Dave contends

that the dictionary meaning of the word parity being

equality, it is unthinkable that the so-called parity which

had been maintained w.e.f. 1.9.87 would be given a go-bye

by taking recourse to the exercise of power under proviso 2

to Sub-section(1) of Section 17 and even if such power

exists, then that power has to be exercised in effectuating

the award and in not contravening the award. In this view

of the matter the judgment of the Kerala High Court,

according to Mr. Dave, need not be interfered with and the

pay structure as is available to the employees of the

nationalised commercial banks could be given to the

employees of the Regional Rural Banks. According to Mr.

Dave, non-implementation of the benefits which the employees

of the nationalised commercial banks have received on the

basis of the subsequent bipartite settlement to the

employees of the Regional Rural Banks, has brought about

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gross disparity and this is contrary to the letter and the

spirit of the award itself. On the language of the second

proviso to Sub-section (1) of Section 17 and the expression

having regard to used therein, Mr. Dave contends that it

merely indicates that the appropriate authority should look

into those conditions but in the present case, a national

tribunal having resolved the dispute by a long drawn process

and having adjudicated the same by clearly indicating that

the pay structure of the employees of the State Government

and the local authorities, could not be a germane factor,

the same cannot be resorted to at this length of time for

nullifying the award which must be held to be binding

between the parties.

Mr. G.L.Sanghi, the learned senior counsel who was

permitted to make his submissions, since a writ petition

filed under Article 32 is pending before this Court, on

behalf of All India Gramin Bank Workers Organisation and

All India Gramin Bank OfficersOrganisation, contended that

the declaration made in award in paragraph 4.425 by virtue

of a judicial adjudication, has formed a part of the

conditions of Service of the employees of the Regional Rural

Banks and, therefore that cannot be tinkered with by any

executive order. The learned counsel further urged that by

taking recourse to the power conferred on the Central

Government under the second proviso to Sub-section (1) of

Section 17, it would not be open to over ride the award and,

therefore, as a necessary consequence, any revision of pay

structure of the employees of the nationalised commercial

banks has to be given effect to so far as the employees of

the regional rural banks are concerned to maintain the

so-called parity as determined by the tribunal of Justice

Obul Reddi. According to Mr. Sanghi, the very idea of the

employer to appoint a committee for re-determination of the

pay structure of the employees of the Regional Rural Banks

is nothing but an attempt to get over the effect of the

grant of parity under the Obul Reddi tribunal and that

should not be permitted by any Court of law. Refuting the

submissions of Mr. P.P.Rao, appearing for the management of

the Regional Rural Banks and the learned Solicitor General

for the Union of India with regard to the performance of the

regional rural banks, Mr. Sanghi placed before us the

letter of the Minister of State (Finance) to a Member of

Parliament, showing deep appreciation for the role played by

the Regional Rural Banks in all its twelve thousand branches

in the country at that point of time and Justice Obul Reddi

Tribunal did take note of the said letter and referred to in

paragraph 4.239 of the award itself. According to Mr.

Sanghi, the High Court of Kerala in issuing mandamus and the

learned Single Judge of the Karnataka High Court in striking

down the appointment of a fresh Committee, have taken the

correct decision and as such the Civil Appeals filed by the

South Malabar Gramin Bank should be dismissed.

Mr. Jitendra Sharma, the learned senior counsel whose

application for intervention has been allowed, appearing for

All India Gramin Bank Employees Association, contended that

the bipartite settlement between the management and the

employees of the nationalised commercial banks are

settlements relating to entire banking industry, such

settlements are entered into under Section 18 of the

Industrial Disputes Act. Having regard to the manner in

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which the dispute between the management and the employees

of the Regional Rural Banks arose and having regard to the

manner in which the said dispute stood referred to the

National Industrial Tribunal and a retired Chief Justice of

a High Court was appointed as such tribunal and the said

tribunal having resolved the dispute by coming to the

conclusion that the employees of the Regional Rural Banks

are entitled to the maintenance of parity with the employees

of the nationalised commercial banks, any change in the

pay-structure of the employees of the nationalised

commercial banks must be given effect to so far as the

employees of the Regional Rural Banks are concerned. The

learned counsel placed reliance on a decision of this Court

in Food Corporation of India Workers Union vs. Food

Corporation of India and Ors., 1990 Supp. SCC 296.

According to Mr. Sharma the High Court of Kerala, both the

learned Single Judge as well as the Division Bench took the

right view and that need not be interfered with.

Before formulating the questions to be considered and

answered in the anvil of the submissions made by counsel for

the parties, it would be appropriate for us to notice the

salient features of the award of Justice Obul Reddi,

inasmuch as the bone of contention of the parties depend

upon the same. The two writ petitions which had been filed

in this Court under Article 32, sought for a parity with the

employees of the Nationalised Commercial Banks in respect of

pay, salary, other allowances and other benefits. The Court

instead of examining the same and answering the same, left

the matter to be heard and decided by a tribunal and the

Central Government agreed to appoint a National Industrial

Tribunal to decide the question relating to pay, salary,

other allowances and other benefits payable to the employees

of the Regional Rural Banks constituted under the Regional

Rural Banks Act, 1976. In the petition filed under Article

32, the validity of Section 17 of the Regional Rural Banks

Act had also been assailed on the ground that the said

provision is ultra vires of Articles 14 and 16 of the

Constitution. The Central Government had issued a circular

dated 26.11.75, laying down the scales of pay and allowances

applicable to the officers and employees to be appointed by

the Regional Rural Banks. The Finance Ministry, Economic

Affairs, Banking Division, had issued a communication on

29th of April, 1980 to all the Chairmen of the Regional

Rural Banks in the country, deciding the pay-scales of the

employees of the said Regional Rural Banks in exercise of

power under the second proviso to Sub-section(1) of Section

17 of the Regional Rural Banks Act. The Government of India

issued another similar communication by letter dated 5th of

February, 1981. The grievances of the employees of the

Regional Rural Banks was taken up on the Floor of the

Parliament by some Members of the Parliament and Professor

Madhu Dandavate had brought a private Bill to amend Section

17 of the Act. The Employees Association and the Finance

Ministry had several discussions on the problem, but yet as

the employees were not satisfied with the decision of the

Union Government, they approached the Court under Article

32. The Union Government as well as the Reserve Bank of

India were averse to give parity in the matter of pay scales

and allowances between the employees of the Regional Rural

Banks and the employees of the Nationalised Commercial

Banks. The tribunal of Justice Obul Reddi summarized the

pleadings in chapter I, indicated the evidence in chapter II

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and datas, particulars and information furnished in response

to his questionnaire by the Chairman of the RRBs, sponsor

banks and State Governments in Chapter III and formulated

the points for determination in Chapter IV. The tribunal

then went on examining the rival stand point and answered

the questions posed. The tribunal came to hold:

Indisputably, Commercial Banks and Regional Rural

Banks carry on similar banking business and participate in

the development of rural economy as partners in the rural

development, acting as instrumentalities of the State in

accordance with the Directive Principles of the

Constitution. Establishment of RRBs is to fill in the

vacuum in the economic development of the rural sector. It

is a national objective in the direction of ushering in a

welfare state. That the RRBs have brought about a

socio-economic reformation in the lives of the small

farmers, traders, agricultural labourers, artisans, SC/STs

and weaker sections is borne out by the evidence on record.

On the question as to the scope and ambit of Section

17 of the Regional Rural Banks Act and whether proviso 2 to

Section 17(1) of the Act offends Articles 14 and 16 in the

context of Article 39(d) of the Constitution, the tribunal

held that the employees of the Regional Rural Banks form a

separate class under a separate statute and so are the

employees of the Nationalised Commercial Banks. Since the

Regional Rural Banks have been constituted under different

statute, the officers and other employees of the Regional

Rural Banks function in accordance with the requirements of

that Statute and they thus form a separate class by

themselves. The 2nd proviso to Section 17(1) is, therefore,

not hit by Articles 14 and 16 of the Constitution. The 2nd

proviso to Section 17(1) does not take away or limit the

jurisdiction in view of the order of the Supreme Court to

decide the question relating to pay, salary, other

allowances and other benefits on the basis of the evidence

on record, as the proviso is adaptable and supple, so as to

extend its application to the facts and circumstances of the

case. The tribunal found that the wage structure should be

such that it should not be unduly below the paying capacity

of the Bank at the top of the class nor unduly above the

paying capacity of the bank at the bottom of the class,

which is reasonably well-managed. The tribunal further held

:

The employees of the RRBs and the employees of rural

branches of commercial banks have a common object, common

purpose, common interest and community of action. Their

duties and functions are similar and they perform the duties

in concerted manner for the economic betterment of the

weaker section of the society, thus contributing their own

share towards the achievement of the national objectives as

envisaged in the preamble of the Constitution and the

Directive Principles of the State Policy. The fact that

employers are different, should not obsess ones mind in

applying principles of equity and justice.

The tribunal further held:

It is crystal clear that the equation of posts under

the second proviso to Sec.17(1) of RRB Act, has not been

made taking into consideration or account the functions and

duties of a B.D.O.or other employees of State Government and

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duties of the RRB employees. The most relevant factor to be

considered while equating posts is the similarity of

functions and duties in a comparable department or industry.

Without regard to the apparent dissimilarities, the Central

Government erred in the matter of equation of the posts.

The pay structure determined should have nexus or relation

to not only the duties and functions of the Office one

holds, but it should also be justly comparable with the

posts in a cognate undertaking or sister industry.

Equations are always made with reference to the

qualifications, level of the post, nature, functions, duties

and the position vis-a-vis similar posts with which they are

equated.

Repelling the plea of the employer that financial

viability should be the criterion in deciding the wage

structure of the RRB employees, the learned tribunal held:

The RRBs have brought about socio- economic

revolution in the hitherto-unbanked under-developed priority

sector by ameliorating the poverty conditions of the

under-privileged, SC/STs and other weaker sections of the

society. That is the paramount objective of the Act. It

should not be lost sight of the fact that the total losses

suffered by rural branches of commercial banks is undeniably

more than the total losses suffered by the RRBs. But the

losses of the rural branches of commercial banks are made up

by the other branches in semi-urban and urban areas and the

RRBs unfortunately for them cannot transfer the losses to

their sponsor banks. The object and purpose is the economic

development of the target groups and the achievements in

that field certainly outweigh considerations of viability or

losses. When the losses are on the increase even in the

rural branches of commercial banks, the RRBs alone cannot be

signled out to bear the cross. I can find no better

authority than the Chairman of the NABADRD who categorically

stated that the ghost of profitability should not haunt us

in judging the performance of the RRBs. Establishment of

RRBs is a national commitment in the direction of ushering

in a welfare State and that is a mandate of the

Constitution. It is in fulfillment of hopes and aspirations

aroused in the preamble and the Directive Principles of the

Constitution that the RRB Act has been enacted and the

performance of such institutions in furtherance of those

principles, shall not be judged from the curved angle of

viability or from the point of view of a private money

lender or businessman or from mere profit and loss

statement.

It also came to the conclusion that there is no

justification in equating the post of a Branch Manager and a

Field Supervisor as of a comparable level with the duties of

Block Development Officer or Extension Officer. It is not

necessary to quote the other findings of the tribunal in its

award. Be it be stated that pursuant to the decision of the

award and in accordance with the directions of the tribunal

that the award should be given effect to with effect from

1.9.1987, the RRB employees got the benefit of the pay-

scales and other allowances as was prevalent in the year

1987 for the employees of the Nationalised Commercial Banks.

Bearing in mind the nature of dispute that was referred for

the adjudication of the tribunal and the findings arrived

at, we will have to answer the contentions raised in these

appeals. But before embarking upon the said exercise, it

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would be relevant to notice that the Union of India itself

had filed an Interlocutory Application in this Court for

certain directions and it was averred therein:-

11. That the Central Government is very much alive

to the need of wage revision in RRBs and is of the opinion

that a wage revision in RRBs is long overdue. The setting

up of Mahalik Committee in November, 1996 and suo-moto

filing of an alternative package to this Honble Court in

May, 1999 is the testimony to the concern and responsibility

felt by the Central Government. That it was in this context

that discussions were held with the Unions to break the

stalemate. Based on the discussions held with the Unions

and keeping in mind the various factors affecting the wage

revision as stated above, the Central Government now

proposes the following package in the larger interest of

RRBs, their employees and depositors. (i) As a gesture of

goodwill and keeping in mind the genuineness of the demand

of the RRB employees, these employees may be granted new

scales w.e.f. 01.4.2000 in the line with scales granted to

commercial bank employees of equivalent level. For

determination of equivalent level, the recommendations of

Equation Committee shall be taken as the basis. This is

going to be a step further as up till now RRB employees have

been demanding new scales as per 6th Bipartite and Officers

wage revision settlement only. The new basic pay of each

RRB employee as on 01.4.2000 would be determined by

notionally granting the benefit of 6th and 7th bipartite

settlement and officers wage revision w.e.f. 01.11.1992

and 01.11.1997 respectively. The formula for fitment of

salary in various scales may also remain the same as was

adopted for commercial bank employees. Thus, as on

01.4.2000, the pay scales of the RRB employees would become

equal to that of their counterparts in commercial banks.

In paragraph (14) of the said application, it was

averred thus:

(14). That the above proposal of the Central

Government is intended to help in promoting industrial peace

and bring litigation in this regard to an end. These

proposals are being advanced without prejudice to the rights

and contentions of the Government in the appeal. The

Central Government proposes to determine under Second

Proviso to Section 17 of the RRBs Act, the remuneration of

officers and other employees appointed by the Regional Rural

Banks in terms of these proposals shall be valid till the

Central Government revise the remuneration of officers and

other employees of RRBs afresh in exercise of its powers

under the said proviso.

The aforesaid assertion unequivocally states that

w.e.f. 1.4.2000, the pay scales of RRB employees would

become equal to that of their counterparts in commercial

banks by granting them benefit of the 6th and 7th bipartite

settlements on the basis of which there had been revision of

wage structure of the employees of the commercial banks on

1.11.92 and 1.11.1997.

On the contentions raised by the learned counsel for

the parties, the first question that arises for

consideration is whether the award given by Justice Obul

Reddi and accepted by the State Government and given effect

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to, can be construed to mean that the pay scales and other

emoluments of the Regional Rural Bank employees would stand

automatically altered, as and when the pay structure of the

employees of the commercial banks get revised, on the basis

of the so-called bipartite settlement between the employer

and the employees of those commercial banks? The award no

where indicated this course of action nor could it have

indicated so, in view of the provisions of the Regional

Rural Banks Act, conferring specific power on the Central

Government to decide the pay structure of the employees of

the Regional Rural Banks. The second proviso to Section

17(1) of the Regional Rural Banks Act, 1976 reads thus:

Provided further that the remuneration of officers

and other employees appointed by a Regional Rural Bank shall

be such as may be determined by the Central Government, and,

in determining such remuneration, the Central Government

shall have due regard to the salary structure of the

employees of the State Government and the local authorities

of comparable level and status in the notified area.

The Legislature, therefore, while enacting a law for

establishment and incorporation of Regional Rural Banks,

conferred power on the Central Government for determining

the remuneration of the officers and employees appointed by

the Regional Rural Banks and that power conferred upon the

Central Government by the legislature cannot be taken away

by an award of a tribunal, constituted by the Central

Government for redressing the grievances of the employees,

which were pending before a Court of law. Even the prayer

in the writ petition that had been filed in the Supreme

Court was not for a declaration and mandamus that the

employees of the Regional Rural Banks would be entitled to

the same scale of pay as and when the pay structure of their

counterparts in the nationalised commercial banks get

revised. To construe the award of Justice Obul Reddi in the

manner as was contended by the counsel, appearing for the

employees of the bank would tantamount to making the second

proviso to Section 17(1) of the Act nugatory, redundant and

otiose and by no stretch of imagination the duties and

powers conferred on the Central Government under the Act

could be made nugatory by interpreting an award of a

tribunal. The disputes raised before the Court being

disputes on several questions of facts, the Court and the

Union Government thought it fit to be adjudicated upon by a

tribunal and the tribunal on discussion on materials, gave

its award. The relevant findings of the tribunal which we

have quoted earlier in this judgment does not in any manner

even contemplate that the power and jurisdiction of the

Central Government under the second proviso to Sub-

section(1) of Section 17 would become redundant and the pay

structure as decided in 1987, pursuant to the award of the

tribunal in respect of the employees of the Regional Rural

Banks would automatically get revised as and when the pay

structure of the employees of the commercial banks get

revised. On the construction of the award of Justice Obul

Reddi and the provisions of the second proviso to Section

17(1) of the Act, we have no hesitation to hold that the

revision of pay structure of the employees of the Regional

Rural Banks could be made, only after the Central Government

exercises its power under the provisions of the Act and

determines the same. If however, the Central Government

fails to discharge its obligation as in the case in hand,

which would result in gross disparity between the pay-scales

of the commercial banks and the Regional Rural Banks, then a

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mandamus could be issued to the Central Government for

performance of its duties and the Central Government would

be bound to perform its duties, taking into account all

germane factors, including the factor of the subsequent pay

revision of the employees of the Nationalised Commercial

Banks.

The next question that arises for consideration is

whether the financial condition of the Regional Rural Banks

could be a vital consideration for the Central Government in

determining the pay structure of the employees of the

Regional Rural Banks? Both Mr. Rao, appearing for the bank

as well as Mr. Salve, appearing for the Union of India had

vehemently urged before us that the financial condition of

the Regional Rural Banks is such that it would not be

possible for the Union of India to give them the pay

structure of the employees of the Nationalised Commercial

Banks. In support of this contention, several decisions of

this Court had been placed before us. In Express Newspapers

(Private) Ltd., and anr. Vs. The Union of India and Ors.,

1959 S.C.R. Page 12, while deciding the Constitutional

validity of the Working Journalists (Conditions of Service)

and Miscellaneous Provisions Act, 1955 and the legality of

the decision of the Wage Board constituted thereunder

purporting to act under Section 9 of the Act, no doubt

construed Section 9(1) of the said Act and held that it was

incumbent on the Wage Board to take into consideration the

capacity of the newspaper industry to pay the rates and

scales of wages recommended by it. The observation of this

Court was in the context of construing Section 9(1) of the

Act and the language used therein, which indicated the

prevalent rate of wages for comparable employment. Under

the Regional Rural Banks Act, while conferring power upon

the Central Government to determine the pay structure of the

employees of the Regional Rural Banks, there has been no

whisper that the financial condition of the bank or capacity

of the employer to pay, would be a germane consideration.

The aforesaid decision, therefore is of no assistance to the

appellant. In the case of Standard Vacuum Refining Co. of

India vs. Its Workmen and anr., 1961(3) S.C.R. Page 536,

the question for consideration was whether the employees

were entitled to Bonus? In that case the Industrial

Tribunal, in a dispute held that the wages paid were fair

but there was still a gap between the actual wage and the

living wage and as such awarded bonus equivalent to five

months basic wage. When that award was assailed before the

Supreme Court and a plea was raised that no bonus could be

payable when the employees are being paid the living wage

standard, the Court had observed while proceeding to examine

the merits of the contention that the employees are being

paid a living wage: Considerations of the financial

position of the employer and the state of national economy

have their say, and the requirements of a workman living in

a civilised and progressive society also come to be

recognised.

But the aforesaid observations bereft of the context

in which the observations have been made, will be of no

universal application and at any time would have no

application to the case in hand, where the aforesaid

contention raised on behalf of the employer was considered

and negatived by the tribunal, appointed to decide the

dispute between the parties and that award of the tribunal

instead of being challenged, has already been implemented.

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In The Hindustan Times Ltd., New Delhi Vs. Their Workmen,

1964(1) S.C.R.234, again an award of an Industrial Tribunal

was subject matter of challenge before the Court. The

dispute before the tribunal was in relation to the pay,

dearness allowance, adjustments, leave rules, gratuity as

well as the working hours and age of retirement. In

considering the legality of the award and after referring to

the earlier decision of the Court in Standard Vacuum

Refining Co., which we have already noticed, this Court had

observed the difference between the minimum basic wage and

the fair wage and above the same, the living wage and it is

in that context, the Court, no doubt had made the

observations that their exist need of considering the

problem on an industry-cum-region basis and on giving

careful consideration to the ability of the industry to pay.

But the aforesaid observations cannot be pressed into

service in the case in hand, where the award of Justice Obul

Reddi tribunal, unhesitatingly negatived the aforesaid stand

of the employer and came to the positive conclusion after

elaborate discussions of the purpose for which these banks

were established and how a case of very special nature

concerning the employees of a banking industry, claiming

parity with the salary structure of the employees of a

sister banking industry is being considered and ultimately,

the tribunal had observed that the Act has been enacted in

fulfillment of the hopes and aspirations aroused in the

preamble and the Directive Principles of the Constitution

and, therefore, the performance of such institutions in

furtherance of those principles is not required to be judged

from the curved angle of viability or from the point of view

of a private money lender or businessman or from mere profit

and loss statement. At any rate, the aforesaid decision of

the tribunal in the form of an award was implemented by the

Central Government and, therefore, having implemented the

same, it would not be permissible for the employer-bank or

the Union of India to take such a plea in the present

proceedings. In Jacob M. Puthuparambil and Ors. Vs.

Kerala Water Authority and Ors., 1991(1) S.C.C.28, the Court

was considering the regularisation of employees serving for

a reasonably long period having requisite qualification for

the job. While indicating what the preamble of the

Constitution obligates the State to secure to all citizens

and while stating how the Directive Principles of State

Policy engrafted in Part IV of the Constitution, reflect the

hopes and aspirations of the people, the Court had

observed:-

This part, therefore, mandates that the State shall

strive to promote the welfare of the people by minimising

the inequalities in income and eliminating inequalities in

status, facilities and opportunities; by directing its

policy towards securing, amongst others, the distribution of

the material resources of the community to subserve the

common good; by so operating the economic system as not to

result in concentration of wealth; and by making effective

provision for securing the right to work as also to public

assistance in cases of unemployment, albeit within the

limits of its economic capacities.

It is this expression within the limits of its

economic capacities in the aforesaid case on which Mr.

Rao, the learned senior counsel for the bank strongly relied

upon in support of his contention that the financial

capacity must be held to be a vital factor in determining

the wage structure of the employees of the Regional Rural

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Banks. We are afraid, this decision is also of no

assistance to the contentions raised inasmuch as in the

dispute between the employer and the employees which stood

resolved by an award of the tribunal (Justice Obul Reddi),

one of the contentions was whether the financial viability

would be the sole criterion in deciding the wage structure

of the RRB employees, which was point No. 10 for

consideration before the tribunal and after an elaborate

consideration of the relevant stand point as well as the

evidence laid by the parties on the point, the tribunal

ultimately observed:

4.239. Now we are dealing with a case of special

nature concerning the employees of a banking industry

claiming parity with the salary structure of employees of a

sister banking industry, which alone is comparable in terms

of duties, functions and responsibilities. The RRB Act

places special emphasis on the development of rural economy

by providing credit and other facilities to productive

activities in the rural areas, particularly to small and

marginal farmers, agricultural labourers, artisans and small

entrepreneurs, and for matters connected therewith and

incidental thereto. The reasons and objects of the Act

provide a highway for the social welfare and common good of

the rural poor living in the priority sector. The preamble

of the Constitution envisages to all citizens social,

economic and political justice. Article 38 in Part IV

enjoins on the State to promote the welfare of the people

and to bring about a social order where social, economic and

political justice prevail in all the institutions of

national life. In particular, the State is asked to strive

to minimise the inequalities in income and eliminate

inequalities in status. The RRBs have brought about socio-

economic revolution in the hitherto-Unbanked under-developed

priority sector by ameliorating the poverty conditions of

the under-privileged, SC/STs and other weaker sections of

the society. That is the paramount objective of the Act.

It should not be lost sight of the fact that the total

losses suffered by rural branches of commercial banks is

undeniably more than the total losses suffered by the RRBs.

But the losses of the rural branches of commercial banks are

made up by the other branches in semi-urban and urban areas

and the RRBs unfortunately for them cannot transfer the

losses to their sponsor banks. The object and purpose is

the economic development of the target groups and the

achievements in that field certainly outweigh considerations

of viability or losses. When the losses are on the increase

even in the rural branches of commercial banks, the RRBs

alone cannot be signled out to bear the cross. I can find

no better authority than the Chairman of the NABADRD who

categorically stated that the ghost of profitability

should not haunt us in judging the performance of the RRBs.

Establishment of RRBs is a national commitment in the

direction of ushering in a welfare State, and that is a

mandate of the Constitution. It is in fulfillment of the

hopes and aspirations aroused in the preamble and the

Directive Principles of the Constitution that the RRB Act

has been enacted and the performance of such institutions in

furtherance of those principles, shall not be judged from

the curved angle of viability or from the point of view of a

private money lender or businessman or from mere profit and

loss statements.

This conclusion of the tribunal has become final, the

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award in question not having been assailed and on the other

hand having been implemented. In the aforesaid premises, it

is a futile attempt on the part of the employer as well as

the Union of India to re-agitate the dispute, which has

already been resolved and has been given effect to. In our

considered opinion, therefore, the aforesaid contention on

behalf of the appellant cannot be sustained and it would no

longer be open, either for the bank or the Union of India to

raise a contention that in determining the wage structure of

the employees of the RRBs, the financial condition would be

a relevant factor.

The next question that arises for consideration is,

what is the meaning of the expression parity used by the

tribunal in giving its award and indicating that the

officers and other employees of the Regional Rural Banks

will be entitled to claim parity with the officers and other

employees of the sponsor banks in the matter of pay-scales,

allowances and other benefits in paragraph 4.425 of the

award of the tribunal. It may be noticed at this stage that

on behalf of the employees, a claim had been made before the

tribunal for application of the principle equal pay for

equal work and that was negatived by the tribunal, but all

the same the tribunal directed to maintain a parity. The

meaning of the word parity in the Concise Oxford

Dictionary is equality; being at par; fact of being even

or odd. In Law Lexicon Dictionary, the word parity has

been defined to mean being on a par with; analogy; close

similarity (as) by party of reasoning. In Webster

Comprehensive Dictionary, the expression parity has been

defined to mean equality, as of condition or rank;

equivalent position; equal value; close resemblance. In

the Words and Phrases Volume 31, the word parity means

act providing for road construction to bring each country in

state to parity required all counties to be brought in

same condition regarding aid in road building, parity

meaning equality. In view of the definition of the

aforesaid expression parity and in the context in which

the tribunal came to hold that the employees of the Regional

Rural Banks would be entitled to claim a parity with the

employees of the Nationalised Commercial Banks, the Union

Government, while exercising its power under the proviso to

Sub-section(1) of Section 17 would be guided by the

aforesaid conclusion of the tribunal and will not be

justified in deciding the pay structure for the employees of

the Regional Rural Banks, which would bring in disparity

between the two groups of employees, even though there may

be a slight variation in the pay structure. As has been

stated earlier, the aforesaid direction to maintain parity

was duly given effect to and the employees of the Regional

Rural banks were given the pay structure applicable to their

counter parts in the Nationalised Commercial Banks w.e.f.

1987, though subsequently in 1992 and 1997, there had been

revision in the pay structure of the employees of the

Nationalised Commercial Banks. Though, we have upheld the

contention of the appellant with regard to the power of the

Central Government to decide the pay structure of the

employees of the Regional Rural Banks, yet there cannot be

any doubt that in so deciding, the Central Government would

be duty bound to maintain the parity with the pay structure

of the employees of the Nationalised Commercial Banks in the

same sense and spirit as Justice Obul Reddi decided and as

was given effect to by the Union Government in the year

1987.

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In the light of the conclusions arrived at by us, the

contention of Mr. Sanghi that the very idea of the employer

to appoint a fresh Committee for re-determination of the pay

structure of the employees of the Regional Rural Banks is

nothing but an attempt to get over the effect of the grant

of parity under Justice Obul Reddi Tribunal, is of great

substance. It has to be borne in mind that the tribunal has

devoted a considerable time and has considered all aspects

of the dispute between the parties and the notification

itself of the Union Government in appointing the tribunal,

indicated that the decision of the tribunal shall be final

and binding. In this view of the matter, the conclusions

arrived at on different questions raised by the tribunal,

cannot be assailed indirectly by taking recourse to a

procedure either by the Union Government or by the Bank.

Though, we have no hesitation in coming to a conclusion that

the Union Government possesses the power to determine the

pay structure in accordance with the second proviso to

Sub-section(1) of Section 17 and, therefore, that power has

to be exercised soon after any pay revision of the employees

of the Nationalised Commercial Banks is effected and while

exercising that power, the Union Government should try to

maintain the parity between the pay structure of the

employees of the Regional Rural Banks and the employees of

the Nationalsied Commercial Banks.

In view of the aforesaid conclusions of ours on the

different contentions raised and in view of the fact that

the Union of India in its Interlocutory Application had

already indicated that the employees of the RRBs will be

granted the new scales w.e.f. 1.4.2000 in the line with

scales granted to commercial bank employees of equivalent

level, we direct that the said determination be a

determination under the second proviso to Sub-section(1) of

Section 17 of the RRB Act and as such the salary of the

employees of the Regional Rural bank w.e.f. 1.4.2000 be

determined accordingly.

We also further direct that for maintaining the parity

between the employees of the commercial banks and the

employees of the Regional Rural Banks, the said Union

Government shall decide the question as to what would be the

salary of the employees of the RRBs subsequent to the 6th

Bipartite settlement having been given effect to, in case of

employees of the commercial banks and with effect from what

date and the benefit flowing from such decision be given to

the RRB employees. The decision in question shall be taken

within a period of six months from today.

Hereafter, as and when the pay structure of the

employees of the nationalised commercial banks get revised

on the basis of any bipartite settlement, the Union

Government should take a decision so far as the employees of

the Regional Rural Banks are concerned, within a reasonable

time and bearing in mind the conclusions, we have already

arrived at, so that the so-called parity could be

maintained.

The impugned judgment of the Kerala High Court, must

accordingly stand set aside. These appeals and Transfer

Petition stand accordingly disposed of.

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