IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.07.2008 CORAM THE HON'BLE MR.JUSTICE S.NAGAMUTHU W.P.No.18240 of 1998 Pandyan Grama Bank Employees Association (PGBEA) (Reg.No.360/RMD) represented by its President, K.Somasundaram .. Petitioner Vs Pandyan Grama Bank, represented by its Chairman, Administrative Office, Virudhunagar 626 001. .. Respondent Writ Petition filed under Article 226 of the Constitution of India to declare that the impugned resolutions of Syndicate of the issue a writ of mandamus forbearing the respondent from recovering any sum or sum, from the emoluments paid to the employees of the Respondent Bank, towards the four additional increments sanctioned by Staff Circular No.13/89 dated 24.08.1989. For Petitioner : Mr.P.V.S.Giridhar For Respondent : Mr.N.G.R.Prasad O R D E R By consent of learned counsel on either side, the writ petition itself is taken up for disposal. 2. The petitioner is a registered Association representing the employees of Pandyan Grama Bank in Virudhunagar. It is represented by its president. The respondent bank, Pandyan Grama Bank is a Bank owned and handled for the purpose of promoting rural development and providing credit for various schemes of the Government. The said bank has been established under the provisions of the Regional Rural Banks Act, 1976. Under Section 8 of the Act, the superintendence and management of the affairs and business of the Regional Rural Banks https://hcservices.ecourts.gov.in/hcservices/ vest in the Board of Directors and there shall be a Chairman under Section 11 of the Act who shall manage the affairs of the Bank subject to the power of the Board, under Section 8 of the Act. Under Section 17 of the said Act, the respondent bank is empowered to appoint suitable number of officers and their employees as necessary and their remuneration shall be determined by the Central Government. 3. Admittedly, the National Industrial Tribunal (in short NIT) passed an award dated 30.04.1990 holding that the employees of the respondent bank should be given pay scales and allowances commensurate with those enjoyed by the employees of the sponsoring bank of comparable level and status from 01.09.1987. The said award of N.I.T. was upheld by the Honourable Supreme Court in its decision in W.P.No.132 of 1984 dated 12.04.1995. 4. In the meanwhile, admittedly, in the year 1988, four additional increments were sanctioned as a gesture of goodwill under Staff Circular No.13/89 dated 24.08.1989, following a memo of understanding signed by the management and the representatives of the union of the employees. While so, the National Bank For Agriculture and Rural Development issued a circular to all the sponsored Banks (Except UPCB)vide reference No.NB.IDD.RRCBD/8187/316 (1IT)/90-91 dated 22.02.1991. Along with the said circular, the National Bank for Agriculture and Rural Development forwarded a copy of the letter No.11-3/90-RRB(I) dated 22.02.1991 issued by the Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division), wherein the NBARD has directed the sponsored Banks to act on the said letter of the Government. 5. In the above said letter of the Government, the Central Government, based on the award of N.I.T. dated 30.04.1990 (cited supra) and the recommendations of the Equation Committee dated 16.01.1991, issued certain instructions in terms of Proviso(1) of Section 17 of the RRBs Act, 1976 for implementing the N.I.T. award and the recommendations of the Equation Committee immediately. 6. Instruction number 5 of the said letter of the Government is as follows; "(v) While the fitment in the above manner should not normally result in reduction in total emoluments drawn earlier by any employee/officer at any level, there may still be a situation where an employee/officer after his fitment into the new scales of pay as above may get total emoluments lower than the total emoluments he was drawing immediately prior to the appointed dated i.e., 01.09.1987 in the RRB scales of pay. In such circumstances, the concerned https://hcservices.ecourts.gov.in/hcservices/ employee/officer shall be paid personal allowance to the extent of difference which should be adjusted to the extent of half of the increase in the Basic Pay or DA or both, accrued to the concerned employee/officer after 01.09.1987. An example of working out the personal allowance is given below: Calculation of Personal Allowance (As on 1st September 1987) Emoluments drawn by an officer as on 01.09.1987 in RRB pay scales (Rs.) Emoluments to be drawn by RRB officer after fitment into sponsor banks pay scales as on 01.09.1987 (Rs.) Basic Pay 1760 1295 DA 669 1191 HRA 220 130 33 (PA) 2649 2649 7. Instruction number 10 of the said letter of the Government is as follows; "10. All allowances/facilities provided to the employees/officers of the RRBs after 01.09.1987 as parity, with State Government Employees/officers are withdrawn forthwith. The allowances, if any, paid through salaries other than those provided in the Bipartite settlements/officers Staff Rules of sponsor banks should be recovered from the employees/officers from the arrears calculated. Such allowances should not also be reckoned for the purpose of arriving at the total emoluments for calculating the personal allowance as mentioned vide paragraph 4(v) of the Circular. Acting on the said instructions, the NBARD instructed all the Regional Rural Banks like the respondent, to make arrangement for payment of arrears to the employees as per the instructions detailed in annexure 2 of the said communication. Based on the said instructions of NBARD, the respondent bank implemented the award of N.I.T. and paid the arrears to its employees. While doing so, it found that the salary and other emoluments paid by way of four increments with effect from 24.08.1989 under Staff Circular No.13/89 dated 24.08.1989 was liable to be recovered from the employees and https://hcservices.ecourts.gov.in/hcservices/ so ordered to recover. Challenging the same, the petitioner's association have come forward with this writ petition. 8. Heard Mr.P.V.S.Giridhar learned counsel for the petitioner and Mr.N.G.R.Prasad learned counsel for the respondent and also perused the records. 9. The contention of the learned counsel for the petitioner is that the memo of understanding granting four increments to the employees of the respondent bank was not limited to any point of time and that they are permanent increments given. Therefore, according to the learned counsel, the same cannot be recovered from the employees. 10. The next contention is that as per the award of N.I.T., the salary and other emoluments of the employees of the respondent bank already drawn by them, should have been taken into account for fixing their salary and emoluments as per the award of N.I.T. and so it is not possible to recover any amount from the employees. It is further contended that the additional increments which were duly sanctioned were paid to the employees and the employees in turn spent the same under the bonafide belief that they were part of their emoluments. Therefore, according to him, even assuming that such payment is an excess payment, it cannot be ordered to be recovered. The further contention is that the additional increment sanctioned in 1989 with effect from 01.06.1988 were part of the pay of the employees till 31.12.1990. The attempt to recover the said amount is made after about 10 years which according to the petitioner is not only unreasonable but bared by all norms of limitation and principle of latches. It is further contended that there is no reason for the respondent bank to delay the implementation of the award of N.I.T. for several years and having failed to implement the award of N.I.T. and the Circular of the Government immediately, it is not open for the respondent bank to recover any amount from the employees. 11. Per contra, the learned counsel for the respondent would submit that 4 increments were paid with effect from 01.06.1988, whereas according to the Circular issued by the Government of India, the guideline number 5, while a fitment in the above manner is made it should not normally result in reduction in total emoluments drawn earlier by any employee/officer at any level and there may still be a situation where an employee/officer after his fitment into the new scales of pay as above may get total emoluments lower than the total emoluments he was drawing immediately prior to the appointed date i.e., 01.09.1987 in the RRB scales of pay. The instruction further reads that in such circumstances, the concerned employee/officer shall be paid personal allowance to the extent of difference which should be adjusted to the extent of half of the increase in the https://hcservices.ecourts.gov.in/hcservices/ Basic Pay or DA or both, accrued to the concerned employee/officer after 01.09.1987. 12. The learned counsel for the respondent would rely on the said guideline of the Government of India to submit that while fitment is made employees of the respondent bank shall be eligible for equal treatment as on 01.09.1987. The respondent bank has done the same rightly. The learned counsel further contends that the claim of the petitioners that the emoluments of the employees including the four increments given should be taken into account for fitment cannot be accepted as the increments were given only from 01.06.1988. 13. I have carefully considered the rival submissions, there is no dispute in this case that as per the Circular of the Government of India, while fitment is made, the crucial date to decide the emoluments of the employees shall be 01.09.1987. The emoluments of the employees as on 01.09.1987 shall be the basis for such fitment and on that basis only the other benefits would be calculated. Admittedly as on 01.09.1987 the employees of the petitioners union did not have the benefit of four increments since the increments were given only with effect from 01.06.1988. Therefore, the emoluments for the purpose of fitment shall not include the above four increments. Thus the contention of the petitioners that for the purpose of fitment these four increments should have been taken into account is absolutely base less. With effect from 01.09.1987 as per the Equation Committee, the employees of the petitioners union were paid salary in terms of award of NIT. When that be so, in my considered opinion, they have to forgo what ever came in their favour at the instance of the respondent bank subsequent to 01.09.1987. This conclusion is so obvious in terms of guideline number 5 issued by the Government of India. 14. In guideline number 10 the Government has directed that the allowances, if any, paid through salaries other than those provided in the bipartite settlements/officers Staff Rules of Sponsor banks paid subsequent to the crucial date should be recovered from the employees/officers from the arrears calculated. In the case on hand, the above stated four increments were not given as a result of any bipartite settlement between the management and the officers. As admitted in the affidavit filed by the petitioner, it was given only as a gesture of good will under Staff Circular number 13/89. Therefore the amounts paid by way of four increments should be recovered from the employees of the respondent bank as directed by the Government. The respondent has rightly done so. I am not in a position to find anything illegal, irregular, unreasonable or arbitrary in the said action of the respondent bank. https://hcservices.ecourts.gov.in/hcservices/ 15. The learned counsel for the respondent relies on an unreported judgment of a Division Bench of this Court in THE CHAIRMAN, PANDYAN GRAMA BANK vs. PANDYAN GRAMA BANK EMPLOYEES ASSOCIATION in W.A.No.527 of 2005. That was a case filed originally by way of writ by the association for a direction to pay to the clerks of the respondent bank by granting one increment with effect from 07.10.1989 in addition to the revised scale of pay with consequential benefits. The writ petition was allowed by a learned Single Judge. A writ appeal came to be filed by the bank. After analysing the award of N.I.T. the circular of the Central Government, Circular of NBARD and other materials, the Division Bench set aside the order of the learned Single Judge. Paragraph 12 of the said judgment in W.A.No.527 of 2005 reads as follows; "12. On a conspectus of all the materials placed before us, we are of the considered opinion that after the award of NIT, there is no concept of awarding increment, fixing the date as 1st October of every year. It is not the case of the respondent that the fitments contained in the recommendations of the Equation committee were improper. In other words, the respondent has not assailed the propriety of the award, recommendations and clarifications, as adverted to supra. After due consideration, the aforesaid fitments were brought to force and all the beneficiaries, including the members of the respondent association and the staff of all RRBs concerned, derived the benefits. Hence, the request of the respondent association will not stand for a minute's scrutiny. 16. The above decision of the Division Bench is squarely applicable to the case on hand and the same fortifies the conclusion arrived by me above. 17. The learned counsel for the petitioner would further submit that the recovery at this length of time should not be done since the increments were not paid on any fault on the side of the petitioner. Believing, that increments are part of their emoluments, the employees have spent the amount and therefore there is no justification to recover the same at this length of time. 18. The learned counsel for the petitioner relies on the judgments of the Honourable Supreme Court reported in (1994) 2 SCC 521 (SHYAM BABU VERMA v. UNION OF INDIA)and 1995 Supp(3) SCC 600 (UNION OF INDIA v. INDIAN RAILWAY SAS STAFF ASSOCIATION). But in my considered opinion, the above judgments are distinguishable. In those cases salary was revised by the department on a mistake in https://hcservices.ecourts.gov.in/hcservices/ understanding the relevant rules and when attempt was made to recover the same after the lapse of a considerable time, the Honourable Supreme Court held that it may not be proper to recover the amount since the revised scale of pay was not paid either on any misrepresentation made by the employees or due to their fault. But in the case on hand, there is no question of revision of salary. Increments were paid subsequent to the crucial date. As stated by the Government of India Circular, the same cannot form part of the regular emoluments of the employees and so they are liable to be recovered. So the principles stated in the above judgments cannot be applied to the facts of the present case. As pointed out by the learned counsel for the respondent, the question of recovering the amount would arise only when the scale of pay is revised. In the case on hand, the salary of the employees were revised only as per the circular of NBARD dated 09.07.1997 though the Circular of the Government is dated 22.02.1991. Immediately after the circular of NBARD, the petitioner bank has initiated steps to recover the amount and thus, there is no delay. In my considered opinion, the said contention of the learned counsel for the respondent deserves to be accepted. I hold that there is no delay much less unnecessary delay on the part of the respondent in initiating the steps to recover the amount. In view of the above, I find no valid ground to give any relief as prayed for in the writ petition. The writ petition fails and the same is accordingly dismissed. No costs. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. jikr To The Chairman Pandyan Grama Bank, The Administrative Officer, Virudhunagar 626 001. 1 cc to Mr.N.G.R. Prasad, Advocate, SR. 38605 1 cc to mr.P.V.S. Giridhar, Advocate, SR. 38378 W.P.No.18240 of 1998 BK (CO) kk 29/7 https://hcservices.ecourts.gov.in/hcservices/