Case: State Bank of India Vs. The Presiding Officer, Central Government Labour Court, Dhanbad and Anr

This appeal by certificate raises a question as to the interpretation and proper application of paragraph 292-of the Sastry Award (hereinafter called the Award). The 2nd respondent was employed on 13-1-1947 as a Grade II Clerk in the Imperial Bank of India on a scale of Rs. 70-4126-EB-130-5-175. This Bank was subsequently taken over by the State Bank of India under the State, Bank of India Act (Act XXIII of 1955). A, few months after the respondent was employed he was given a pay of Rs. 74/- be cause of his proficiency in using the machine. On 13-1- 48 he earned an increment and his basic pay was Rs. 78/-. On 1-1-49 he was promoted to Grade I so that on the date of his promotion he was drawing a basic pay of Rs. 100/-. On 1-1-50 he earn ed an increment and his basic pay I was Rs. 108/-. The Sastry Award prescribed a uniform scale of pay for clerks of Grades 1 &11 and gave directions to make fitments in that Grade, . The 2nd respondent disputed the computation of the benefit s admissible to him under, The- Award and. consequently applied for a settlement of his dispute. under section 33C(2) of the Industrial Disputes Act (XIV of 1947) which was referred to the Labour Court. The Labour Court allowed the application and fixed the basic Pay of the Applicant under paragraph 292 of the Award at Rs. 164/- p.m. as on 1-4-1954 with directions to the appellant to pay to the respondent a sum of Rs. 1647.91 for the period from 1-4-54 to 31-12-61. The appellant challenged the Award under Articles 226 and 227 of the Constitution but the High Court accepting the interpretation placed by the Lavour Court on paragraph 292 of the Award dismissed the petition. Inasmuch as the dispute between the parties is dependent upon the view which can reasonably Ile taken of paragraph 292 of the Award, it will be necessary to examine the directions contained therein,that case the respondent had entered the Banks service on, 20-2-43 and on the 31st January 1950 he was getting a salary of. Rs. 86/- p.m. On 1-4-54 he was employed at Abohar Branch of the Imperial Bank of India and on 15-5-54 he was transferred to Amritsar. Under the classification in the Bank Award, Abohar was class IV area while Amritsar was a Class 11 area. On the basis that Abohar was a class IV area the respondents salary was fixed by the Bank on 1-4-54 at Rs. 112/ p.m. and on his transfer to Amritsar, a class II- area, in consideration of his length of service he wa s given three increments and his salary was fixed at Rs. 133/-. The respondents case was that he was entitled to three increments over Rs. 126/- which it is said he was drawing at Abohar, i.e. Rs. 148/- p.m. On a dispute being referred under section 33C(2) of the Industrial Disputes Act, the Labour Court, Delhi accepted the respondents case that his pay should be fixed at Rs. 148/- p.m. Though the court did not apply clause (4) (b) it nonetheless came to the same conclusion. on the basis that Abohar was treated as a class IV area with retrospective effect from 1-4-54 and the calculation on that basis would fix his basic salary at Rs. 126/- on 1-4-54 and on transfer from that area to Amritsar, a class 11 area, he would g et an increment and his salary would be fixed at Rs. 133/-. In that case the meaning and significance of the term point-to- " point adjustment mentioned in clause (2) was not discussed nor has there been anything said. as to the contingencies in which those directions were to be applied. If point-to- point adjustment signifies the fixation of the workman at the stage in the new scale equal to or above his basic pay as on 31-1-50, clause (4) (a) itself has provided for that and there was no need for clause (2) or clause (4) (b). A perusal of the report of the Gajendragadkar Commission in this respect, however, furnishes a clue to this enigma. In paragraphs 109 to, 111 the Commission sets out directions in the Award, the modification made by the Labour Appellate Tribunal and the Governments decision thereon. A reference to paragraph 109. would not only show the nature of the scheme proposed in the Award but indicates what in fact was, meant by point-to-poi nt adjustment.

Court's reasoning:
The contention of the 2nd respondent is sat taking the basic pay drawn by him as on 31st January 1950 to the nearest integer the length of service should be computed on the basis of the number of years which he would have to serve in the junior scale to draw that amount of basic pay. It appears to us on a careful examination of the terms of clause (5) (a) that the directions in this clause are inapplicable to him. Clause (5) (a) provides for only the, cases of those who start on a higher initial basic pay by getting additional increments or are, given advance increments in any scale whether junior or senior. In such contingencies how the length of service for the purposes of clause (4) (b) is to be computed was provided for in clause (5) (b). The directions given in that clause are that the length of service in the scale in which he is and in which he got an increment or increments either at the initial start or by special promotion should be that which he would have taken to reach the basic pay which he would draw on 31st January 1950 with the initial start. The condition precedent to the applicability of the directions in this clause is the receipt of increments or increment by way of special promotion. An increment is in the same scale while a promotion is from one scale to a higher scale. A promotion from a lower grade to a higher grade though both the grades may be in the same cadre is not an increment or increments by way of special promotion. The use of the word special would itself show that what is contemplated is advance increments in the same grade. What is sought to be taken into account by the Award is the actual service of the workman or where he has been given increments in the same scale he is sought to be compensated by giving him a corresponding advantage in the new scale. This is sought to be effected by taking into account the increment or increments earned in the cadre in computing the length of service under clause (4) (b). As the 2nd respondent did not get any increment or increments in the existing scale which was Grade I either at the initial start or by way of special promotion, the actual service in the cadre has to be computed for the purposes of clause (4) (b). The words same cadre in that clause as explained earlier would refer to both Grade IT and Grade 1. The actual service in both the grades will alone be considered for giving him an increment for every three years of service which in his case works out to one increment in respect of his 3 years. service: from 13 -1-47 to 31-1-50. Even if the initial. increment of Rs. 4/- in Grade II which was given to him for being proficient in the working of a machine is taken into account under clause: (5) (b) that would add one more year to the three years of actual service rendered .by him but that does, not give him any further advantage. He will, only be entitled to one increment under clause (4) (b). In the result we. hold that the 2nd respondent has to be fitted in the new scale on a basic pay of Rs. 148/- and on that basis the emoluments to which he would be entitled will have to be worked out. We accordingly direct the Labour Court to give the necessary direction in this regard.