Case: State Bank Of Travancore Vs. Elias Elias &amp; Ors

1. K. E Elias-first respondent herein - was an employee of the Orient Central Bank Ltd. He was posted to do duty as a Civil Agent. The Orient Central Bank Ltd. was amalgamated with the Kottayam Bank Ltd. The amalgamated bank was named the Kottayam Orient Bank Ltd. -hereinafter called the K. O. Bank. The services of Elias were transferred to the K. O. Bank. Elias continued to perform the duties of a Civil Agent of that Bank and certain specific duties relating to court cases were assigned to him by the K. O. Bank. The K. O. Bank issued a circular sanctioning the salary and allowances payable to all its subordinate staff under three heads - Assistants, Clerks and Peons The salary and allowances paid to the clerks were Rs. 46-2-50 3-80 EB-4-100 plus dearness allowance Rs. 20/. No separate scale was fixed for "Civil Agents" and it is common ground that Elias was `given the salary and allowances payable to Clerks.2. Pursuant to a scheme of amalgamation prepared by the Reserve Bank under S. 45 (4) (d) (ii) of the Banking Regulation Act 10 of 1949, the K. O. Bank was amalgamated with the State Bank of Travancore - hereinafter called the "State Bank". Under that scheme, Elias was admitted as an employee of the State Bank and he was allotted the duties of a "Civil Agent". To fix the remuneration and the terms and conditions of the employees under the State Bank, the Board of Directors constituted a Committee to assess the qualifications of all its employees. Pursuant to a report received from the Committee, the State Bank directed that the "Civil Agents" be treated as "subordinate staff" and that their remuneration be refixed. The "subordinate staff" consisted of peons, watchmen, sweepers and employees with similar duties. Their scale of remuneration was Rs. 28-2-86-1 -96-EB-1 -101. The scale of remuneration of the clerical staff was Rs. 112-307.3. Elias submitted a representation to the Deputy General Manager that in absorbing him in the subordinate staff he was denied the statutory guarantee of remuneration and terms and conditions of service. This representation was rejected by the Deputy General Manager by letter dated October 19, 1963, and Elias was informed that "having regard to his educational qualifications and experience it had been decided by the State Bank to place him in the subordinate cadre." Elias made a representation to the General Manager which was rejected on December 11, 1963 and he was informed that the Bank was unable to grant his request for absorption into the "clerical cadre".4. Elias then moved a petition in the High Court of Kerala for a writ of certiorari or other appropriate writ quashing the orders dated October l9, 1963 and December 11, 1963, fixing his rank in the cadre of subordinate staff. A Single Judge of the High Court dismissed the petition. He observed that since there was no post of a "civilin the State Bank, that Bank was competent to place Elias in the subordinate cadre. The learned Judge also observed that, having regard to the educational qualifications and experience Elias was properly placed in the "subordinate cadre", and no ground was made out to quash the fixation of the rank and status based on an assessment of his qualifications and experience.5. Elias appealed to a Division Bench of the High Court. During the pendency of the appeal, the State Bank applied for taking on record the decision dated September 15, 1967, of the Reserve Bank of India, holding that the State Bank was justified in not giving Elias the status of a clerk, and in placing him in the residual classification of "subordinate staff". This document was admitted on the record. The Court in allowing the appeal observed that on a consideration of the relevant circumstances, Elias was entitled to We rank and status of a clerk under the State Bank, and the order of the Reserve Bank being in violation of the statutory provisions contained inthe Banking Regulation Act, 1949, the orders dated October 13, 1963 and December 11, 1963 were liable to be set aside. This appeal has been filed with special leave granted by this Court.

Court's reasoning:
10. The Banking Regulation Act, 1949, guarantees the same terms and conditions of service, and the transferee bank is entitled to "fit" the employees of the transferor bank into the corresponding rank or status. In doing so it has to take into account the qualifications and experience of the employees of the transferor bank. But in "fitting" an employee into the transferee bank, the rank and status enjoyed by an employee in the transferor bank cannot be ignored. A person performing certain duties in the transferor bank when admitted into the service of the transferee bank may be so "fitted" in a cadre which is equivalent in status and rank with the status and rank of the employees in the transferee bank, but in grading him into the cadre of equivalent status and rank experience and qualifications must be taken into account. On the ground of lack of experience and qualifications a person cannot be deprived of his rank and status in the transferee bank. Clause (ii) to the first proviso of Section 45 (5) (i) does not, in our judgment, authorise the transferee bank to "fit" an employee in the transferee bank into a post with rank and status lower than the rank and status enjoyed by the employee in the transferor bank. To accept the contention raised on behalf of the State Bank is in effect to defeat the guarantee relating to the terms and conditions of service under Clause (i) of Section 45 (5) and the first proviso thereto.11. In our judgment the High Court was right in holding that the orders passed by the State Bank "fitting" Elias into a subordinate cadre infringed the guarantee under Section 45 (5) (i) ofthe Banking Regulation Act, 1949.