G.S. KAUSHIK AND ANR.

UNION OF INDIA AND ORS.

APRIL 12, 1996

[S.C. AGRAWAL AND G.T. NANA VAT!, JJ.]

Labour Law :

Indust1ial Disputes Act, 1947-S.2(s) :

Awarcf-Employees of Regional Rural Banks and Nationalised Commercial Bank-Paiity in emoluments between-Passed by National Jndus/lial

Tiibunal-Directions issued for its implemc11tatiolt-Co11stitutio11 of India 1950, A1t. 32.

The petitioners, All India Regional Rural Bank Employees Association and All India Gramin Bank Workers Organisation representing the employees of the Regional Rural Banks (RRBs.) filed writ petitions in this Court seeking parity in emoluments between the employees of the Regional Rural Banks inter seas well as the employees of the Nationalised Commercial Banks. In Accordance with the directions by this Court giving in the said urit petitions, the Central Government constituted a National Industrial Tribunal to decide the question relating to pay, salary, and other benefits payable to the employees of RRBs.

The Tribunal gave its award holding that upto August 31, 1987 the F employees of RRBs should be extended the pay scale and allowances as are adnaissible to the State Govern1nent einployces in comparable posts and status and that with effect from September l, 1987 the said employees shall be entitled to the pay scales, allowances and other benefits on par with the employees of comparable levels in corresponding posts of respective spon- G sor banks. With regard to equation of posts, the Tribunal had held that the Central Government might decide the same in consultation with such authorities as it might consider necessary. The Central Government appointed an E!1uation Committee whose report had been accepted by the Central Government whereby RRBs employees had been brought into the sponsor bank scales of pay with effect from September 1, 1987.

H 225

The petitioners filed the present applications in this Conrt seeking directions regarding implementation of the directions given by the Tribunal in the award. The main grievance of the applicants was regarding non-payment of arrears payable to the employees of RRBs in terms of the award of the Tribunal. This Court directed the respondents to prepare a scheme in consultation with the Employees' Association with regard to the discharge of the said liability of payment of arrears. In pursuance of the said directions the Central Government constituted the 'Basu Committee', to prepare a scheme with regard to payment of arrears to all the employees of RRBs as a consequence of the implementation of the award of the Tribunal read with the report of the Equation Committee, which submitted C its report.

Disposing of the applications, this Court directed

1. The award of the National Industrial Tribunal shall be treated as an award of a tribunal under the Industrial Disputes Act, 1947 and it will be open to the employees of Regional Rural Banks, irrespective of the fact whether they fall within the ambit of the expression 'workman' as defined in Section 2(s) of the Industrial Disputes Act or not, seek their remedies for implementation of the award in respect of those matters before the appropriate forum under the Industrial Disputes Act. [233-D-E]

2. The liability for payment ol arrears payable to the employees of the RRBs for the period upto December 30, 1990 in terms of the award of the Tribunal shall be discharged by the respondents in the following manner : [232-B-C]

(a) 53 RRBs, which are in profit, shall make payment as per the scheme suggested by Basu Committee and will be operative from February

20, 1996. [232-C)

(b) The RRBs which are being identified for restructuringlrevamp- G ing will make payment as per the scheme suggested by Basu Committee and will be operative with effect from August 20, 1996. [232-D)

(c) As regards remaining RRBs the scheme as suggested by Basu Committee would apply subject to the modification that the amount of arrears shall be paid in four instalments instead of three instalments as H suggested by Basu Commitee and instalment will be for 25% of the amount

G.S. KAUSHIK v. u.o.r. 227

of arrears. The first instalment would be payable by August 20, 1997 and A other instalments would be payable after yearly intervals. [232-E-F]

(d) The employees falling in categories (b) and (c), as mentioned at page No. 7 4 of the Report of Basu Committee, shall be paid all the arrears in lump sum in one instalment. Jn respect of 53 RRBs, which are in profit, the said amount, if not paid, shall be paid by April 30, 1996. Jn respect of B RRBs under restructnring/ revamping and remaining RRBs, the said amount shall be paid by August 20, 1996 and August 20, 1997 respectively.

(232-F-G]

(e) The employees falling in categories (d) and (e) as mentioned at page 74 of the report of the Basu Committee shall be paid the arrears in C two instalments as suggested in the scheme prepared by Basu Committee.

Jn respect of RRBs under restruduring/ revamping and remaining RRBs, the first instalment will be payable by Apdl 30, 1996, Angus! 20, 1996 and August 20, 1997 and the second instalment will be payable by February 20, 1997, August 20, 1997 and August 20, 1998 respectively. (232-H; 233-A-B] D

(0 No interest will be payable on amount of arrears to be paid as per these directions. (233-B]

(g) It will be the responsibility of the Union of India to ensure that the payment are duly made as per these directions. (233-C] E

CIVIL ORIGINAL JURISDICTION : I.A. No. 1

Writ Petition (c) No. 132, of 184 Etc.

Under Article 32 of the Constitution of India.

Dipankar P. Gupta, Solicitor General and Rajinder Sachhar, K.T.

Anantharaman) for Khaitan & Murthy, AK. Goel, Mis. Sheela Goel, S.N.

Terdol, Ms. Lakshmi Aiyangar, R.P. Srivastava, C.V. Subba Rao, R.N. G Keshwani, Vijay Kumar Verma, P.K. Chakraborty, H.S. Parihar, Rishi Kesh and Ms. A. Subhashini, for the appearing parties.

The Judgment of the Court was delivered by

S.C. AGRAWAL, J. : These applications for directions have been H

A filed in Writ Petitions "los. l32 of 1984 and 7149-50 of 1982. In the said Writ Petitions filed by the All India Regional Rural Banks Employees Association and the Ail India Gramiu Bank Worker's Organisation representing the employees of the Regional Rural Banks (for short 'RRBs'), the petitioners sought parity in emoluments between the employees of RRBs

imer se as well as the employees of Nationalised Commercial Banks. The said Writ Petitions were disposed of by this Court by the following order dated September 1, 1987 :

"We are happy to know that the Central Government had 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 Regional Rural Banks constituted under the Regional Rural Banks Act, 1976. The learned counsel for the petitioners also agreed that a reference may be made lo the proposed Tribunal. In view of the above, it is not necessary to pronounce on the questions of law raised in these writ petitions before us. We leave all the contentions. The Central Government shall refer the dispute to the Tribunal, preferable to a retired Chief Justice of High Court, within four weeks from today. We hope that the Tribunal will pronounce its award as expeditiously as possible.

These writ petitions are disposed of accordingly."

In accordance. with the directions given by this Court, the Central Government, by order dated.November 26, 1987, constituted a National Industrial Tribunal (hereinafter referred to as 'the Tribunal') consisting of Hon'ble Mr. Justice S. Obul Reddy, retired Chief Justice of Andhra p Pradesh High Court, as its Chairman. By the said order the disputes relating to pay, salary, other allowances and other benefits payable to the employees of RRBs in terms of the pleadings of the parties in Writ Petitions (Civil) Nos. 7149-50 of 1982 and 132 of 1984 filed in this Court were referred to the Tribunal. The Tribunal gave its award dated April 30, 1990, wherein the Tribunal has held that upto August 31, 1987 the G employees of RRBs should be extended the pay scale and allowances as are admissible to the State Government employees in comparable posts and status and that with effect from September 1, 1987 the said employees shall be entitled to the pay scales, allowances and other benefits on par with the employees of comparable levels in corresponding posts of respec- H live sponsor banks. With regard to equation of posts, the Tribunal has held

G.S. KAUSHIK v. U.0.1. [S.C. AGRAWAL, J.] 229

that the Government of India may decide the same in consultation with A such authorities, as it may consider necessary. The Government of India appointed an Equation Committee on October 5, 1990 under the Chairmanship of Shri P. Kotaiah, the then Managing Director of the National Bank for Agriculture and Rural Development (for short 'NABARD'). The Equation Committee submitted its report on January 8.1991 which has B been accepted by the Government of India and instructions have been issued to ail the implementing agencies by circulars dated February 22, 1991 whereby RRBs employees have been brought into the sponsor bank scales of p_ay with effect from September 1, 1987. The salaries of employees in the employment of RRBs are being paid in the revised scales from January 1, 1991.

By these applications the applicants are seeking directions regarding implementation of the directions given by the Tribunal in the award. The main grievance of the applicants is regarding non-payment of arrears payable to .the employees of RRBs in terms of the award of the Tribunal. D As per the counter affidavit filed on behalf of the Union of India the said liability is about Rs. 220 crores. By order dated September 12, 1994, the Court directed the Union of India and NABARD to prepare a scheme in consultation with the Employees' Association with regard to the discharge of the said liability. In pursuance of the said directions, the Government of India constituted a Committee under the Chairmanship of Shri K. Basu E General Manger, NABARD, (hereinafter referred to as 'Basu Committee'), to prepare a scheme with regard to payment of arrears to all the employees of RRBs as a consequence of the implementation of the award of the Tribunal read with the report of the Equation Committee.

Basu Committee, in its report dated February 22, 1995, has suggested a F scheme for payment of the arrears payable to the employees of RRBs in

t.r1ns of the award. Jn respect of the einployees who are in the employment of RRBs as on the date of pronouncement of the Scheme and employees who were/are dismissed/whose services were/arc terminated/who ceased to be in employment of the RRBs by any other method save those who G retired/resigned/deceased whether prior to or after the pronouncement of the Scheme, the Scheme envisages payment of the arrears in three instalments. The first instalment to be paid within six months from the date of pronouncement of the scheme by this Court, the second instalment to be paid not later than one year from the date of payment of the first instalment, and the third instalment to be paid not later than one year from the H

A date of payment of the second instalment. As per the said scheme the first instalment would cover 50% of the arrears while the second and third instalments each would be in respect of 25% of the said arrears. As regards employees who have retired/resigned upto and including the date of pronouncement of the scheme by this Court and in respect of legal heirs

of deceased employees who died either while in service or otherwise upto and including the date of pronouncement of the scheme, it has been suggested that the entire payment should be paid lump sum in one instalment. As regards those employees who retired/resigned after the date of pronouncement of the scheme by this Court and legal heirs of deceased employees who died either in service or otherwise after the date of pronouncement of the scheme by this Court, it has been suggested that the payment may be made in two instalments of 50% each Basu Committee suggested that the funds for the purpose of payment should be provided by the Government of India in the form of soft loan and there shall be a moratorium for repayment of the loan by the RRBs to the Government of D India for a period of five years from the date of the receipt of last instalment by RRBs from the Government of India and the repayment of the loan by RRBs to the Government of India after the moratorium period shall be as determined by the Government of India in co11o5ultation with each RRB separately. With regard to the rate of interest to be charged by

E the Government of India from the RRBs, it is suggested that it shall not exceed one fourth of the Bank Rate prevailing as on the date of pronouncement of the scheme by this Court.

The response of the Union of India to the scheme suggested by the Basu Committee is contained in the affidavit of Shri Sudhir Shrivastava, F Deputy Secretary, Ministry of Finance, Department of Economic Affairs, Banking Division, dated February 20, 1996. In the said affidavit it has been stated that providing loan to RRBs for the purpose of payment of arrears as recommended by Basu Committee has been considered in depth and was not found appropriate for the following reasons :

"(a) The RRBs are in wide different and varying financial position and uniformity may not be consistent with their widely different fi.nancial performance and achievements. The provision of loan from Government of India, would require repayments and thus burden the RRBs.

G.S. KAUSH!K v. U.0.1. [S.C. AGRAWAL. J.] 231

(b) The provision of equity on the other hand is being made as a A part of a comprehensive restructuring package. Further the servicing of equity is optional and contingent on generation of profits.

( c) Any decision regarding RRBs should ideally also reflect the views of the other two shareholders, namely, the sponsor bank and State Governments.

The equity routs necessarily requires examination by the said shareholders of the problems of continuing losses and financial implications a.rising therefrom.

( d) The Government considers it infeasible and inappropriate to provide loans to RRBs towards financing revenne expenditure.

This would result in similar demands from other undertakings and increasingly strain and drain Government's budgetary resources.

Government's view is to put together a package that will enhance

the viability of RRBs. The long term interests of the employees D are also best subserved in this manner. The scheme for payment of arrears, as stated above, is a bona fide attempt at reconciling the interests of the depositors, the borrowers, the RRBs themselves and the employees. Respondent No. 1 respectfully submits that the Hon'ble Court may be pleased to approve the measures in the facts and circumstances of the case stated hereinbefore."

In the said affidavit the following course of action has been suggested:

"(i) 49 out of 196 RRBs have been taken up for comprehensive restrncturing by way of infusion of additional share capital. These 49 banks along with 4 RRBs in profit (in all 53 RRBs) have already been asked to make payments in accordance with the scheme suggested by Basu Committee.

(ii) At least 50 more RRBs are being identified for restrnctur- G ing/revamping. Such banks will also start paying the arrears as per the scheme suggested by Basu Committee, within six months from date.

(iii) It is submitted that the remaining RRBs will also commence payment within six months from date but they may be allowed to H

pay in four equal annual instalments."

The learned Solicitor General of India, appearing for the Union of India, has submitted that the number of RRBs in the category li) mentioned above is now 53.

B Having regard to the submissions contained in the affidavit of Shri Sudhir Shrivastava, we direct that the liability for payment of arrears payable to the employees of the RRBs for the period upto December 30, 1990 in terms of the award of the Tribunal shall be discharged in the following manner :

(1) 53 RRBs, as mentioned in para 4(i) of the affidavit of Shri Sudhir

Srivastava, shall make payment as per the scheme suggested by Basu Committee in its report dated February 22, 1995. The said scheme in respect of these banks will be operative with effect from February 20, 1996.

(2) The RRBs falling under para 4(ii) of the affidavit of Shri Sudhir Srivastava, will make payment as per the scheme suggested by Basu Committee. In respect of these Banks the scheme will be operative with effect from August 2G, 1996.

(3) As regards remaining RRBs falling under para 4(iii) of the affidavit of Shri Sudhir Srivastava, the scheme as suggested by.Basu Committee would apply subject to the modification that the amount of arrears shall be paid in four instalments instead of three instalments as suggested by Basu Committee and each instalment will be for 25% of the amount of arrears. The first instalment would 1.Je payable by August 20, 1997 and other instalments would be payable after yearly intervals.

(4) The employees falling in categories (b) and (c), as mentioned at page No. 74 of the Report of Basu Committee, shall be paid all the arrears in lump sum in one instalment. In respect of RRBs mentioned in para 4(i) of the affidavit of Shri Sudhir Srivastava the said amount, if not paid, shall G be paid by April 30, 1996. In respect of RRBs mentioned in paras (ii) and

(iii) of the affidavit of Shri Sudhir Srivastava, the said amount shall be paid by August 20, 1996 and August 20, 1997 respectively.

(5) The employees falling in categories (d) and (e) as mentioned at page 74 of the report of the Basu Committee shall be paid the arrears in H two instalments as suggested in the scheme prepared by Basu Committee.

<~.S. K1\liSl!IK 1. ll.O.I. [S.C.NiRi\\V,\l., J.[ 233

ln rc, pccl of RRB, mentioned in paras 4(i), 4(ii) and 4(iii) of the affidavit A nf Shri Sudhir Sriva.'>taYa. the first in~, taln1ent \\'ill he payable by ;\pril .10,

JlJ1J(l, Au~U.\I lfi, \l)'.)(1 and . .\ugust :?.n, 1997 and the :-iccond in:taln1cnt \Vil\ he 11~1yahk: h) February 20, 1997, .A.11g:ust 20: 19')7 and 1\ugut 20, 1998

n.:::-pc{:I l\\.:!y.

((1) Nu interest \\'ill be paj'ahlc 1_in ctrnnunt ()f irrears lo be paid as per thc~, c directinns.

(7) It \\ill be th.:: r<.:sponsibility of the Union of India Lo cnsu1c th:.it the payn1c11t are July n1adc as per these direclions.

Apart from the payment of arrears, the petitioners ha\'e alsi.J snugh1 directions in respect of other directions given by the "rrihunal in !he A\\ard.

We do nol propose to deal with these grivances of lhc pc!iLiuncr~. \\!;,:.

lhcreforc, direct that the a\vard of the National Industrial Tribun; d :, h.d! be treated as an award of a tribunal under the Industrial Disputes Art.

1947 and it will be open to the employees of RRBs, irrespective of the facl \vhcther they fall within the an1bit of lhe expression \vorkrnan' as defined in Section 2(s) of the Industrial Disputes Act or not, to seek their remedies for implementation of the a\vard in respect of those matters hefore the appropriate forum under the Industrial Disputes Act. The applications for directions are disposed of accordingly. No costs.

V.S.S.

Matter disposed of.