Case: STATE BANK OF INDIA Vs. RAVINDRA NATH

terms and conditions spelt out in the letter are subject to review and revision by the Bank from time to time. 14. Mr. Kaul learned counsel for the appellant-Bank has pointed out that there was no alteration in the perquisites granted to the respondent which was to the tune of Rs. 1,60,000/- per month. It was only the salary component which was reduced on availability of the Cost of Living Index in March, 2000. 15. A perusal of relevant conditions as reproduced above shows that salary of US $ 1965 was not promised to be paid for the entire period of posting in Johannesburg. It was subject to change either way that is increase or decrease. The Bank has explained that such salary of US $ 1965 was fixed in absence of Cost of Living Index on the basis of recommendations of the Committee. Later, the Standing Committee was constituted in exercise of the powers under Section 18 of the Act mandating that any change in future in the salaries and perquisites and other service conditions has to be affected with the prior approval of the Standing Committee. Section 18 of the Act reads as under:?18. Central Board to be guided by directions of Central Government.—(1) In the discharge of its functions the State Bank shall be guided by such directions in matters of policy involving public interest as the Central Government may, in consultation with the governor of the Reserve Bank and the chairman of the State Bank, give to it. (2) All directions shall be given by the Central government and, if any question arises whether a direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final.?16. It is in view of such directions that the appellant Bank framed service conditions and allied matters. It is thereafter on 15.1.2001, the Working Group of the Standing Committee decided the salary payable to the Officers of the Bank. Such salary structure is meant for all Officers of Public Sector Banks posted abroad. Such recommendations are applicable in non-discriminatory manner to all Officers of the Public Sector Banks. 17. Though, certain representations are said to have been made by the Chief Executive Officer on behalf of the five Officers posted at Johannesburg but there is no communication that the Officers are finding it difficult to work on the basis of such reduced salary. The salary was reduced from the month of January, 2001, though, the respondent-writ petitioner has joined only on 21.09.2000. The respondent never offered to seek repatriation to India and in fact sought voluntary retirement on depositing of Rs. 10,00,000/- for further stay in Johannesburg. It shows that there was no financial loss suffered by him on account of reduction in salary, but actually, he found it lucrative to resign from the service of the Bank and to stay in Johannesburg after payment of substantial amount of Rs. 10,00,000/-. 18. The salary has been fixed in terms of directions of the Government of India, in respect of all Public Sector Banks keeping in view the Cost of Living Index in different countries and making adjustments in the salaries according to the Cost of Living of each country. The Cost of Living in each country is separate and distinct and such factors have been taken into consideration while fixing the salary on the basis of Bulletin of Statistics published by U.N. in March, 2000. The earlier fixation of salary for Johannesburg was fixed by Working Group w.e.f 01.01.1995 on the basis of Consumer Price Index of 1992 as per International Financial, Statistics (IMF Publication - September, 1995). The revised salary structure is not meant for any particular official but is applicable to all Officers of Public Sector Banks posted abroad. 19. The argument of the learned counsel for the respondent is that when the respondent was deputed in June, 2001 the Cost of Living Index as in March, 2000 was available, therefore, there was no reason to fix the salary on the basis of Consumer Price Index of the year 1995. It has come on record that the Bulletin of Statistics published by the U.N. in March, 2000 was considered by the Standing Committee in its meeting held on 15.01.2001. The respondent was informed of his reduced salary the very next day. Therefore, the Cost of Living Index on the basis of March, 2000 Report was considered in January, 2001. Such decision cannot be said to be arbitrary only because it was taken after about nine months of the publication of the data. 20. The reasoning given by the High Court that there is no privity of contract of the respondent-writ petitioner with the Standing Committee is not tenable. The respondent-writ petitioner as an Officer of the Bank is bound by the salary structure approved by the Bank for its Officers. The decision of the Standing Committee is a part of the decision-making in respect of salary payable to the employees of the Banks. The employee of a Bank has no right that he should be associated with the decision-making process in respect of the fixation of salary. However, if the question of reasonableness of salary arises, then in exercise of power of judicial review, the Court may examine the decision-making process. In exercise of power of judicial review, we do not find any infirmity in the decision of Standing Committee taken on 15.01.2001 in pursuance to the direction of the Government of India issued under Section 18 of the Act. 21. Since, the salary has been fixed for all Officers of the Public Sector Banks in a non-discriminatory manner keeping in view the Cost of Living Index, we find that the High Court erred in law in setting aside the reduction in salary. There is reasonable basis of reduction of salary. Still further there was no promise ever made to the respondent-writ petitioner that his salary of US $ 1965 shall remain unchanged during the period of his posting.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. A perusal of relevant conditions as reproduced above shows that salary of US $ 1965 was not promised to be paid for the entire period of posting in Johannesburg. It was subject to change either way that is increase or decrease. The Bank has explained that such salary of US $ 1965 was fixed in absence of Cost of Living Index on the basis of recommendations of the Committee. Later, the Standing Committee was constituted in exercise of the powers under Section 18 of the Act mandating that any change in future in the salaries and perquisites and other service conditions has to be affected with the prior approval of the Standing Committee.It is in view of such directions that the appellant Bank framed service conditions and allied matters. It is thereafter on 15.1.2001, the Working Group of the Standing Committee decided the salary payable to the Officers of the Bank. Such salary structure is meant for all Officers of Public Sector Banks posted abroad. Such recommendations are applicable in non-discriminatory manner to all Officers of the Public Sector Banks.Though, certain representations are said to have been made by the Chief Executive Officer on behalf of the five Officers posted at Johannesburg but there is no communication that the Officers are finding it difficult to work on the basis of such reduced salary. The salary was reduced from the month of January, 2001, though, the respondent-writ petitioner has joined only on 21.09.2000. The respondent never offered to seek repatriation to India and in fact sought voluntary retirement on depositing of Rs. 10,00,000/- for further stay in Johannesburg. It shows that there was no financial loss suffered by him on account of reduction in salary, but actually, he found it lucrative to resign from the service of the Bank and to stay in Johannesburg after payment of substantial amount of Rs. 10,00,000/-.The salary has been fixed in terms of directions of the Government of India, in respect of all Public Sector Banks keeping in view the Cost of Living Index in different countries and making adjustments in the salaries according to the Cost of Living of each country. The Cost of Living in each country is separate and distinct and such factors have been taken into consideration while fixing the salary on the basis of Bulletin of Statistics published by U.N. in March, 2000. The earlier fixation of salary for Johannesburg was fixed by Working Group w.e.f 01.01.1995 on the basis of Consumer Price Index of 1992 as per International Financial, Statistics (IMF Publication - September, 1995). The revised salary structure is not meant for any particular official but is applicable to all Officers of Public Sector Banks posted abroad.The argument of the learned counsel for the respondent is that when the respondent was deputed in June, 2001 the Cost of Living Index as in March, 2000 was available, therefore, there was no reason to fix the salary on the basis of Consumer Price Index of the year 1995. It has come on record that the Bulletin of Statistics published by the U.N. in March, 2000 was considered by the Standing Committee in its meeting held on 15.01.2001. The respondent was informed of his reduced salary the very next day. Therefore, the Cost of Living Index on the basis of March, 2000 Report was considered in January, 2001. Such decision cannot be said to be arbitrary only because it was taken after about nine months of the publication of the data.The reasoning given by the High Court that there is no privity of contract of the respondent-writ petitioner with the Standing Committee is not tenable. The respondent-writ petitioner as an Officer of the Bank is bound by the salary structure approved by the Bank for its Officers. The decision of the Standing Committee is a part of the decision-making in respect of salary payable to the employees of the Banks. The employee of a Bank has no right that he should be associated with the decision-making process in respect of the fixation of salary. However, if the question of reasonableness of salary arises, then in exercise of power of judicial review, the Court may examine the decision-making process. In exercise of power of judicial review, we do not find any infirmity in the decision of Standing Committee taken on 15.01.2001 in pursuance to the direction of the Government of India issued under Section 18 of the Act.Since, the salary has been fixed for all Officers of the Public Sector Banks in a non-discriminatory manner keeping in view the Cost of Living Index, we find that the High Court erred in law in setting aside the reduction in salary. There is reasonable basis of reduction of salary. Still further there was no promise ever made to the respondent-writ petitioner that his salary of US $ 1965 shall remain unchanged during the period of his posting.