Supreme Court of India

Reserve Bank Of India & Ors vs C.N. Sahasranaman & Ors on 30 April, 1986

Equivalent citations: 1986 AIR 1830, 1986 SCR (2) 881, AIR 1986 SUPREME COURT 1830, 1986 LAB. I. C. 1630, 1986 SCC (SUPP) 143, (1986) 2 APLJ 37.2, (1986) 2 LABLJ 316, 1986 SCC (L&S) 547, (1986) 2 LAB LN 778, (1986) 3 SCJ 63

Author:
Sabyasachi Mukharji

Bench:
Sabyasachi Mukharji
,
R.S. Pathak

PETITIONER:
RESERVE BANK OF INDIA & ORS.

Vs.

RESPONDENT:
C.N. SAHASRANAMAN & ORS.

DATE OF JUDGMENT30/04/1986

BENCH:
MUKHARJI, SABYASACHI (J)
BENCH:
MUKHARJI, SABYASACHI (J)
PATHAK, R.S.

CITATION:
1986 AIR 1830 1986 SCR (2) 881
1986 SCC Supl. 143 1986 SCALE (1)939
CITATOR INFO :
RF 1987 SC1399 (20)
D 1987 SC2086 (19,30)

ACT:
Centre-wise seniority and promotion through written
departmental examinor - Reserve Bank of India (Staff)
Regulations 1948 - Administrative Circular No. 8 and 9 dated
13.5.1972, clause II(a)(i) of the Scheme for Promotion -
Staff Officers Grade II (Now designated Grade A) covered
under - Whether part of the scheme is violative of guarantee
of equality before law and equal opportunity in Public
employment as enshrined in
Article 14
and
of the
Constitution - Industrial Disputes - Settlement by direct
negotiations or through collective bargaining value of.

HEADNOTE:
The Reserve Bank of India had its offices at nearly 15
centres throughout India. The service conditions of the
employees of the Reserve Bank are governed by the Reserve
Bank of India (Staff) Regulations, 1948 and Administrative
orders passed from time to time and also by Industrial
Disputes Awards or Settlements by negotiations or settlement
by collective bargaining. In the Reserve Bank separrate
departmentwise, Groupwise seniority and promotion for cadres
of officers and non-officers (Award Staff) was prevalent
from time to time.
In September 1962, the issue of maintenance of combined
seniority list at each centre for the purpose of promotions
was referred to the National industrial Tribunal presided
over by Justice K.T. Desai. The recommendations of the said
Desai Award were approved by the Supreme Court in All India
Reserve Bank Employees' Association v. Reserve Bank of
India, [1966] 1 S.C.R. 25 @ 57 and Reserve Bank of India v.
N.C. Paliwal & Ors., [1977] 1 S.C.R. 377. In 1970, the
Supervisory Staff in class I was upgraded to staff officers
in class I pursuant to the Memorandum of Settlement dated
9th January, 1970 between
the Bank and the All India Supervisory Staff Association,
subject to certain conditions. The channel of promotion from
the post of clerk (Grade II) is staff officer (Grade A) and
further from that post to the staff officer (Grade B) and so
on upto Grade F. Prior to 6th June 1970, oral interviews of
all the eligible candidates were held for being considered
for promotion. Then Administrative circular No. 20 was
introduced for the first time for departmental promotions of
clerk Grade I/(Assistant) etc. to the post of Staff Officer
Grade II (Sub-Accountants & Research Superintendent) in all
the groups. On 7th May 1972, the Bank took several steps
towards equalising promotional opportunities of employees by
introducing the Optee Scheme of 1965, the Optee Scheme of
1966 and finally by entering into a Memorandum of Settlement
dated 7th May 1972 with the Association accepting the
principle of maintenance of a combined seniority. On or
about 7th May 1972, the Bank formulated a "Scheme for
Promotion; Staff Officer Grade II" after giving full
opportunity to the Association to make its suggestions. On
7th May 1972 the Bank and the Association further agreed by
exchange of correspondence that the ratio of direct recruits
to the total strength of staff officers Grade II shall be at
17.5% - 82.5%. On 13th May 1972, the Bank introduced the
Administrative Circular No. 8 on "Scheme for Promotion:
Staff Officers Grade II". On the same day the Bank
introduced simultaneously the Administrative Circular No. 9
on "Scheme for combined Seniority List and Switch over from
non-clerical to clerical cadre with effect from 7th May
1972, Both the circulars are binding on all employees of the
Bank in view of the decision of the Supreme Court in N.C.
Paliwal's case. On May 22, 1974, the Bank took a decision
based on the recommendations of the cadre Review Committee
under the Chairmanship of Mr. Justice J.L. Naim and issued
Administrative circular No.15 to prepare a common seniority
List and to provide for inter group mobility at the lowest
level of officers in Grade A with effect from 1st January
1970. On or about 7th January 1978, the Bank took further
decision, based on the recommendations of two Committees
headed by Mr. Justice Naim and Mr. Justice Thareja
respectively and issued Administrative Circular No. 8 to
combine the seniority of all officers in Grade 'B' and above
with effect from 22nd May 1974 with a view to equalise
opportunity for promotions among officers. Both the
circulars Nos. 15 of 1974 and 8 of 1978, were approved by
the Supreme Court in V.T. Khanzode & Ors. v. Reserve Bank of
India & Anr., reported in [1982] 2 S.C.C. 7.
%
The respondents who were grade II clerks working at
Nagpur Reserve Bank ever since their employment which
commenced somewhere between 1960 and 1965 who were aggrieved
by Part of Clause II(a)(i) of the scheme for promotion -
Staff Officers Grade II covered under Administration
Circular No. 8 challenged its validity averring that under
the new scheme chance to appear in the examination depended
not on relative merits but merely on the fortuitus
circumstances, namely, the number of vacancies occurring in
a particular centre in a panel year which had no nexus with
the purpose of promotion viz. to secure efficient cadre of
staff officers. The High Court accepted the pleas of the
respondents and by its order dated 19th March 1981 struck
down that part of clause II(a)(i) of the scheme listed
"Number of candidates for the qualifying test". As a result
no examination could be held for panel years 1980-81, 1981-
82 and 1983-84. Hence the appeal by special leave.
Allowing the appeal and approving the modified scheme
of 1984 as per the orders and directions of the Supreme
Court including holding a referendum, the Court,
^
HELD: 1. In service jurisprudence there cannot be any
service rule which would satisfy each and every employee and
its constitutionality has to be judged by considering
whether it is fair, reasonable and does justice to the
majority of the employees and fortunes of some individuals
is not the touch-stone. Further, whether there has been
denial of equality of the view of promotion or any
constitutional right infringed or not cannot be judged,
where interest of large number of people are concerned, in
the abstract. [909 D-E; B-C]
Kamal Kanti Dutt & Ors. v. Union of India & Ors.,
[1980] 3 S.C.R. 811 referred to.
2. Circular No. 9 is a counterpart of Circular No. 8.
Circular No. 8 having been held valid, by the Supreme Court
Circular No. 9 must also follow to be good. Circular No. 9
cannot stand in vaccum and in isolation. It is a step to the
fulfilment of the object to be achieved by Circular No. 8.
Viewed in that point of view and as a feasibility and having
regard to the factors and in regard to the history of
Reserve Bank employees, the scheme as modified by the Bank
and as
accepted by vast majority indeed an over willing majority of
the workmen is a proper and just scheme and does not suffer
from the vice of
article 14
or
article 16
or any other
constitutional guarantees. [909 F-G]
3.1 Settlement of disputes by direct negotiations or
settlement through collective bargaining is always to be
preferred for it is best suited for indusrial peace which is
the aim of legislation for settlement of labour disputes.
[909 H; 910 A]
New Standard Engineering Co. Ltd. v. N.L. Abhyankar &
Ors., [1978] 2 S.C.R. 798 and Tata Engineering & Locomotive
v. Their Workmen, [1982] 1 S.C.R. 929 referred to.
3.2 The reference held pursuant to the orders of this
Court dated 2nd May, 1984 undoubtedly indicates that
majority of the employees are in favour of acceptance of the
modified settlement. In matters of service conditions it is
difficult to evolve as ideal set of norms governing various
conditions of services and in grey area where service rules
operated, if more than one view is possible without
sacrificing either reasons or commonsense the ultimate
choice has necessarily to be conditioned by several
considerations ensuring justice to as many as possible and
injustice to as few. These principles however, significant
do not authorise the majority of the employees to trample
upon the constitutional guarantees or rights of the
individuals or minority employees. Majority cannot thwart or
barter away the constitutional rights of the minorities. The
constitutional guarantees are to protect this very danger.
But in judging the content of the constitutional rights, the
entire perspective of the equality of opportunity here and
denial of equal right in public employment have to be viewed
in a fair, reasonable and just perspective. Viewed in that
light, it is true there may be individual instances
exemplifying injustices by postponing or delaying the
chances of promotions of the contesting respondents yet that
does not deny them their constitutional right in its proper
measure, and the considerations that have weighed with the
making of the modified scheme and in light of the other
considerations it must be observed that with whatever care
and objectivity or foresight any rule is framed, some
hardship, inconvenience or injustice might to result but the
paramount consideration is the reconciliation of the
conflicting claims of two important
constituents of service - one which brings fresh clerical
employees and the other mature experience. There has been a
happy merger of these two considerations in the scheme
proposed and in that merger, no violation of the guaranteed
rights of the opposing respondents have occurred. [910 C-H;
911 A-B]
3.3 The promotion scheme having been evolved after
careful consideration and having been in operation ever
since the inception of the Bank with modification from time
to time as a result of the negotiations under the
Industrial
Disputes Act
should not be modified drastically. In such
matters one should hasten slowly. [911 B-C]
4.1 The promotion on the basis of centrewise seniority,
in the instant case is constitutionally valid, inasmuch as
the appellant bank is an undertaking which comes within the

Industrial Disputes Act, 1947
and the class III employees
are fully covered by the definition of the term "workman" in

section 2(s)
of the said Act and one of the principles
normally applicable in fixing their terms and conditions of
service is industry-cum-region principle. [893 G-H]
Ramachandra Shankar Deodhar & Ors. v. State of
Maharashtra & Ors., [1974] 2 S.C.R. 216 distinguished.
Hindustan Antibiotics v. Workmen, [1967] 1 S.C.R. 652
and All-India Reserve Bank Employees' Association v. Reserve
Bank of India, [1966] 1 S.C.R. referred to.
4.2 The integration of different cadres into one cadre
could not be said to involve any violation of the equality
clause. The right of promotion should not be confused with
mere chance of promotion. Though the right to be considered
for promotion was a condition of service, mere chances of
promotion were not. It is clear therefore, that the chances
of promotion in some areas occur more often in smaller
centres than in other bigger centres like Bombay, Calcutta,
Delhi but that is fortutious and would not really affect the
question, and violate
articles 14
and
of the
Constitution. The justice of the case should be judged in
conjunction with other factors, the convenience, the future
of the family etc. [899 G; 903 E-F]
Kamal Kanti Dutt & Ors. v. Union of India & Ors.,
[1980] 3 S.C.R. 811, at pages 841-842; Mohd. Shujat Ali v.
Union of India, [1975] 1 S.C.R. 449 and Reserve Bank of
India v. C.T. Dighe, [1982] 1 S.C.R. 107 at 121-122 referred
to.
4.3
Regulation 31
of the Reserve Bank of India (Staff)
Regulations 1948 is subject to the condition that "unless in
any case it be otherwise distinctly provided." In the
instant case, it has been distinctly provided in the
appointment letters as to where the class III employees of
the Bank are liable to serve. All appointment letters issued
to all staff members appointed in class III and below ever
since the inception of the Bank contained, identical or
similar provision specifying the offices in which of the
Bank these employees are required to work. Therefore, there
was definite provision contrary to as contemplated by

Regulation 31
of the Reserve Bank of India (Staff)
Regulation 1948 and therefore the general provisions of

Regulation 31
would not have any application. [904 B-C; D-E]
4.4 If an All-India cadre is enforced in respect of
Class III employees, it would result in injustice to all the
employees in that class at the injustice to all the
employees in that class at the smaller centres for a
considerably long period of time leading to industrial
unrest. The result of applying the principles of an All-
India cadres for this class of employees would be that the
senior-most in that whole cadre All-India wise would alone
have to be considered for promotion. In such a case, for a
considerable long time, only employees of the older offices
namely, Bombay, Nagpur, Madras, Calcutta and Delhi will have
to be considered, they being by far senior most among the
All-India employees and such a consideration and empanelling
would continue for a very long time as the principal basis
of the settlement was not one of promotion on merit but
rather an upgradation on mere seniority, the only
qualification being an examination to determine fitness.
Once fitness was determined by the examination the ranking
in that examination did not come into play thereafter and
the successful candidates were again listed according to
centrewise seniority in the matter of upgradation and
promoted as and when vacancies at that centre occur. [905 A-
E]

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3234 of
1981.
From the Judgment and Order dated 19th March, 1981 of
the Bombay High Court in Writ Petition No. 2334 of 1980.

G.B. Pai and R.H. Parihar for the Appellant.
C.N. Sahasranaman in person, S.P. Sharma in person,
K.T.A. Anantha Raman, R. Basu Devan, A.K. Goel, Ajit
Pudissery, M.S. Gupta and V.J. Francis for the Respondents.

The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J. In the Reserve Bank of India
separate Departmentwise and Groupwise seniority and
promotion for cadres of Officers and non-Officers (Award
Staff) was prevalent. This would be apparent from the
decision of this Court in Reserve Bank of India v. N.C.
Paliwal & Ors., [1977] 1 S.C.R. 377 as well as V.T. Khanzode
and Ors. v. Reserve Bank of India and Anr., [1982] 2 S.C.C.

7.
In September, 1962, need was felt for maintenance of
combined seniority list at each centre for the purposes of
promotions recommended by National Industrial Tribunal
presided over by Mr. Justice K.T. Desai. The recommendations
of the said Desai Award for centre-wise combined seniority
were approved by this Court in 1966. See in this connection
the observations in
All India Reserve Bank Employees
Associations v. Reserve Bank of India
, [1966] 1 S.C.R. 25 at
57 and
Reserve Bank of India v. N.C. Paliwal & Ors.
,
(supra).

In 1970, the Supervisory Staff in Class I was upgraded
to Staff Officers in Class I pursuant to the Memorandum of
Settlement dated 9th January, 1970 between the Bank and the
All India Supervisory Staff Association, subject to certain
conditions.

Administrative Circular No. 20 dated 6th June, 1970 was
issued on introduction of written examination for
departmental promotions of clerk Grade I/Assistants etc. to
the post of Staff Officers Grade II (Sub-Accountants and
Research Superintendents) in all the groups. This circular
was not made operative.
On 7th May, 1972, the Bank took several steps towards
equalising promotional opportunities of employees by
introducing the Optee Scheme of 1965, the Optee Scheme of
1966 and finally by entering into Memorandum of Settlement
dated 7th May, 1972 with the Association accepting the
principle of maintenance of a combined seniority list at a
centre. See in this connection the observations in
Reserve
Bank of India v. N.C. Paliwal
, (supra).

On or about 7th May, 1972, the Bank formulated a Scheme
for Promotions : Staff Officer Grade II' after giving full
opportunity to the Association to make its suggestions. On
7th May, 1972, the Bank and the Association further agreed
by exchange of correspondence that the ratio of direct
recruits to the total strength of Staff Officers Grade II
should be at 17.5% : 82.5%. Reference in this connection may
be made to Annexure II & III to the further Affidavit for
the bank filed on 27th August, 1982 and which are in the
appeal Paper Book at p. 134 onwards.

On 13th May, 1972, the Bank introduced the
Administrative Circular No. 8 dated 13th May, 1972 on
'Scheme for Promotions - Staff Officers Grade II' which is
binding on all employees of the Bank. On the same day the
Bank introduced simultaneously the Administrative Circular
No. 9 on 'Scheme for Combined Seniority List and switchover
from non-clerical to clerical cadre' with effect from 7th
May, 1972 which is binding on all employees of the Bank. The
Constitutional valdity of this scheme was upheld by this
Court in
Reserve Bank of India v. N.C. Paliwal
(supra).

On 22nd May, 1974, the Bank took a decision, based on
the recommendations of the Cadre Review Committee under the
Chairmanship of Mr. Justice J.L. Nain and issued the
Administrative Circular No. 15 dated 22nd May, 1974 to
prepare a common seniority list and to provide for inter
group mobility at the lowest level of officers in Grade 'A'
with effect from 1st January, 1970. See
V.T. Khanzode & Ors.
v. Reserve Bank of India
, (supra).

On or about 7th January, 1978, the Bank took further
decision, based on the recommendations of two Committees,
one headed by Mr. Justice Nain and another headed by Mr.
Thareja,
and issued Administrative Circular No. 8 dated 7th January,
1978 to combine the seniority of all officers in Grade 'B'
and above with effect from 22nd May, 1974 with a view to
equalise opportunity for promotions among officers.
In this
connection, reference may also be made to
V.T. Khanzode &
Ors. v. Reserve Bank of India
, (supra).

This appeal arises from a decision of the division
bench of the Bombay High Court, Nagpur dated 19th March,
1981 whereby it has struck down a part of clause (II)(a)(i)
of 'the Scheme for Promotion - Staff Officers Grade II (now
designated Grade 'A') covered under the Administration
Circular No. 8 dated 13th May, 1972. It may be mentioned
that as a result no examination could be held for panel
years 1980-81, 1981-82, and 1982-83.. The said clause was as
follows :

"II. Number of candidates for the qualifying
test:-

(a)(i) As estimate of the vacancies anticipated to
occur in each office during a 'panel year' i.e.
1st September to 31st August will be declared by
the Bank in advance and the number of candidates
in that office to be called for the test in order
to fill those vacancies in that office will not
exceed twice the number of such vacancies subject
to sub-clause....."

It may be mentioned that the decision was rendered in
respect of a petition under
Article 226
of the Constitution
by three petitioners who were Grade II clerks working at
Nagpur Reserve Bank ever since their employment which
commenced somewhere between 1960 to 1965. The Reserve Bank
has its offices at nearly 15 centres throughout India. The
service conditions were governed by the Reserve Bank of
India (Staff) Regulations, 1948 (hereinafter called
"Regulations").

The High Court by its order which is under appeal has
set aside the impugned part of the scheme. It would be
necessary to refer to
the said judgment
briefly.

It may be mentioned that this judgment of the High
Court was delivered on 19th March, 1981. This Court granted
special leave against
the said judgment
on 4th December,
1981. Then
after that on 5th March, 1982, this Court upheld the
constitutional validity of the Administrative Circular No. 8
dated 7th January, 1978 to combine the seniorty of all
Officers.

See
V.T. Khanzode & Ors. v. Reserve Bank of India
,
(supra). This Court further directed on 29th July, 1982 that
in the interest of justice All India Reserve Bank Employees
Class III Workmen Associations and All India Reserve Bank
Workers Organisation be added as the party-respondents, and
the appeal was heard for some time. Then this appeal after
hearing was adjourned and this Court directed the Reserve
Bank to frame a new scheme for promotion by order dated 20th
October, 1982. On 13th December, 1982, the Bank filed
further affidavit, inter alia, annexing revised draft of
clause II to the Scheme for Promotion of Staff Officers
Grade 'A' annexed to the Administrative Circular No. 8. This
was submitted for acceptance on behalf of the appellants
before us. The amendment was opposed by the opposing
respondents by their Affidavits-in-Opposition.

On 21st March, 1983, it is stated, that the Bank
entered into a settlement by exchange of letters with All
India Reserve Bank Employees Association which is recognised
and representative Union of Class III Workmen employees. The
Bank thereafter filed a Rajoinder setting out principles
governing recruitment and promotion of Staff Officers Grade
'A' on 22nd February, 1983 including the modification of the
existing scheme mutually agreed between the Bank and the
Association. On 2nd May, 1984, this Court directed that the
settlement between the Bank and the Association be referred
to Class III employees and opinion of the majority shall be
taken on the basis of referendum by secret ballot and the
result of the referendum should be communicated to this
Court on 16th July, 1984 and the appeal to be heard
thereafter. The result of the referendum by secret ballot
was filed by the Bank by an Affidavit. The summary of the
result of the referendum seems to be as follows :

"PARTICULARS TOTAL VOTES PERCENTAGE TO
------------ ----------- --------------
CAST AGGREGATE NO.
OF VOTES CAST
----------- ----------- --------------
No. of votes
accepting the
Settlement 11,309 67.67%
No. of votes not
accepting the
Settlement 5,277 31.58%
No. of votes
declared invalid 126 00.75%
--------- ---------
16,712 100.00%
---------- ----------
Total number of eligible voters : 18,953
Total votes polled :16,712 (88.18%)"

The main question which needs determination is whether
part of the scheme mentioned before introduced by the
Reserve Bank of India is violative of guarantee of equality
before law and of equal opportunity in public employment as
enshrined in
articles 14
and
of the Constitution. The
High Court noted that the point arose at the instance of
three petitioners who were Grade II working at Nagpur branch
of Reserve Bank ever since their employment which commenced
somewhere between 1960 to 1965.

The Reserve Bank has its offices at nearly 15 centres
throughout India. The channel of promotion from the post of
Clerk (Grade II) is Staff Officer (Grade A) and further from
the post to the Staff Officer (Grade B) and so on upto Grade
F. Prior to 6th June, 1970, oral interviews of all the
eligible candidates were held for being considered for
promotion. Then Administration Circular No. 20 was issued
introducing scheme of Written Examination for the first time
for giving departmental promotions. The learned judges of
the High Court were of the view that perhaps this was done
to introduce element of objectivity in the test. Candidates
who passed the said qualifying examination were included in
the `fit' list and became eligible being considered for
promotion to the next higher post. The High Court was
concerned, as mentioned hereinbefore, with the said new
scheme which is introduced by Circular dated 13th May, 1972.

Analysing the said scheme, the High Court was of the
view that under the new scheme candidates from a particular
centre numbering twice the anticipated vacancies in that
centre alone were eligible to appear in the departmental
examination and consequently to qualify for promotion. The
grievance of the petitioners before the High Court was that
under the new scheme, chance to appear in the examination
depended not on relative merits but merely on the fortuitous
circumstances, namely, the number of vacancies occurring in
a particular centre in a panel year. According to the
petitioners, this had no nexus with the prupose of promotion
viz. to secure efficient cadre of Staff Officers and
therefore the scheme, according to the petitioners, was bad
in law. The High Court found considerable force in this
submission.

In the impugned judgment under appeal the High Court
relied on
Ramchandra Shankar Deodhar & Ors. v. State of
Maharashtra & Ors.
, [1974] 2 S.C.R. 216. According to the
High Court the promotion on the basis of Centre-wise
seniority was opposed to
the said decision
of this Court.
There, the petitioners were Tahsildars in the erstwhile
State of Hyderabad. After the new State of Bombay was
constituted with territories drawn from various existing
States including Hyderabad under the
States Reorganisation
Act, 1956
, equation of posts and determination of inter se
seniority was done by the Allocated Government Servants'
(Absorption, Seniority, Pay and Allowances) Rules, 1957.
Under these rules of 1957, the Government of Bombay declared
that the posts of Mamlatdar in the former State of Bombay
should be deemed to be equivalent to the posts of Tahsildar
from the former State of Hyderabad and the posts of Deputy
Collector in the former State of Bombay should be deemed to
be equivalent to the posts of Deputy Collector allocated
from the former State of Hyderabad. The recruitment to the
posts of Deputy Collector was provided for by Rules of 30th
July, 1959 (called 1959 Rules) according to which vacancies
to the posts of Deputy Collector were to be filled from
three sources 50% by nomination on the basis of the result
of competitive examination; 25% by directly recruited
Mamlatdars who have put in at least seven years' service
including the period spent on probation and the remaining
25% by Mamlatdars promoted from the lower ranks in the
revene departments. The reservation of 25% in favour of
directly recruited Mamlatdars was made by the second proviso
of rule (1) of the Rules. On 7th April, 1961 the Government
laid down the principles for regulating the preparation and
revision of select list of Mamlatdars/Tahsildars fit to be
appointed. It was held by this Court by a bench of five
learned judges that the second proviso to rule (1) of the
1959 Rules was void as being violative of
Article 16
of the
Constitution. This Court was of the view that the procedure
for promotion to the cadre of Deputy Collectors followed by
the State Government was also invalid on the ground that it
denied equality of opportunity of promotion and was
therefore hit by
Article 16
of the Constitution and hence
the Government resolution dated 7th April, 1961 was quashed.

What was done in the aforesaid case was to have an
integrated service of Mamlatdars for the purpose of
promotions to Deputy Collectors' grade which was admittedly
a State-wise grade and that promotion was on the basis of
merit-cum-seniority. It was found that select list based on
merit and seniority Division-wise for promotion to higher
grade, viz. that of the Deputy Collector and these lists
were liable to be varied from time to time on periodical
assessment of merits of the incumbents in that list, and
this Court was of the view that it might lead to injustice
in that if promotions were made from these lists Division-
wise there was a possibility of a less meritorious candidate
with lesser seniority being promoted in preference to a more
meritorious candidate elsewhere. In the instant appeal it is
necessary to consider the question of promotions from the
Centre-wise cadre to an All India Cadre and not a State
cadre. If, therefore, any analogy or parallel has to be
sought, then it must be from the All India cadre of the
Government of India service. It may be noted that in an All
India Service considerations other than merit on seniority
have to be taken into account. In the appellant Bank, the
procedure is to give a qualifying test just to ascertain the
fitness for upgradation. In effect upgradation is really
done on the basis of seniority alone subject to fitness.
In

Deodhar
's case, the emphasis was rather on merit rating and
the discrimination was implicit against more meritorious
candidates with higher seniority. But in the instant case
the appellant Bank is an undertaking which comes within the

Industrial Disputes Act, 1947
and the Class III employees
are fully covered by the definition of the term "workman" in

section 2(s)
of the said Act and one of the principles
normally applicable in fixing their terms and conditions of
service is the Industry cum region principle.

It was stated
by this Court in
Hindustan Antibiotics v. Workmen
, [1967] 1
S.C.R. 652 that those principles should also be
applied to State-run industries. The question whether the
recruitment to the lowest cadre of officers viz.

Class A
officers should be essentially from Class III employees by
promotion directly came up for consideration by this Court
in
All-India Reserve Bank Employees' Association v. Reserve
Bank of India
, [1966] 1 S.C.R. 25 and this Court held that a
workman can raise a dispute on such a point. It was in that
context that a dispute was in fact raised and a settlement
under
section 18(1)
of the Industrial Disputes Act, 1947 was
entered into with the recognised union namely All India Bank
Employees Association on 7th May, 1972, and the
Administration Circular AC-9 and AC-8 dated 13th May, 1972
issued.

The High Court in the impugned judgment proceeded on
the basis that in fact the Class III employees of the
Reserve Bank of India belonged to an All India Cadre freely
transferable from one place to another. This aspect will be
dealt with later on.

The division bench of the Bombay High Court in the
decision under appeal found that the ratio of
the said
decision
in
Deodhar
's case applied to the facts and
circumstances of the instant case because the cadre of clerk
(Grade II) was all India cadre and not a local cadre and
secondly the post of Staff Officer (Group A) was a
transferable one even in practice was a common point.
Examination was also held on All-India basis.

Therefore, the
High Court was of the view that even if it was held that the
petitioner's post was not of All India cadre, it would make
no difference for applicability of the principle
laid down
by
this Court in
Deodhar
's case (supra).

Promotion was included in the ambit of equality of
employment or appointment under
article 16
of the
Constitution, according to the Bombay High Court. The Bombay
High Court noted that there were very junior officers like
respondents 4 and 5 before the Bombay High Court who had
been posted then at Bhopal office. The petitioners before
the Bombay High Court were otherwise qualified and confirmed
employees having 15 years service to their credit and yet
they did not get the chance to appear in examination as
employees and some respondents got their chances even though
they were appointees of 1980 and were not even confirmed.
The
respondents 4 and 5 before the Bombay High Court were given
the benefit not on the basis of comparative merit but only
on the basis, according to the Bombay High Court, of
fortuitous event that there had been vacancies in Bhopal
office. Therefore, the basis on which the scheme provided
was promotion according to the vacancies in the zonal
offices. This circumstance of anticipated vacancies in the
zonal offices has no nexus, according to the Bombay High
Court, to the merit-cum-seniority aspect.
The Bombay High
Court also could not sustain the contention urged on behalf
of the appellant before us that the scheme was contractual
and therefore was binding on the petitioners. It was
submitted that the petitioners before the Bombay High Court
and the three respondents before us were not members of the
union and were not parties to the agreement mentioned
before. Moreover, according to the High Court, by agreement
one could not give up one's right. It was contended before
the High Court that the validity of the scheme had been
upheld by the decision of this Court in the case of
Reserve
Bank of India v. N.C. Paliwal & Ors.
, (supra) where one part
of the scheme came up for scrutiny, but according to the
High Court as this point was not the subject matter of
scrutiny
,
the said decision
did not affect the position.

The main grounds on which the High court of Bombay set
aside the impugned portion of the circular which has been
set out hereinbefore was the position that the presumption
that the staff from which the promotion was made namely
Class III employees, clerical and non-clerical belonged to
an All-India cadre and that promotion on the basis of
centre-wise seniority was opposed to the decision of this
Court in the case of
R.S. Deodhar
(supra).

The three petitioners in the court below namely Shri
C.N. Sahasranaman, Shri R. Raman and Shri S.D. Peshkar who
were the three staff members in the employment of the
appellant Reserve Bank of India are respondents to this
appeal. Intervention has been permitted by the Court during
the course of the proceedings by the All India Reserve Bank
Employees' Association, the recognised union who represented
the majority of the workmen, and the All India Reserve Bank
Workers Organisation who represented the minority of the
workers both of whom have been made party-respondents. The
other interveners are All-India Reserve Bank Employees
Federation at Hyderabad and All-India Reserve Bank Staff
Association. The majority recognised union as well as the
last mentioned union are supporting the stand taken by the
appellant bank.

In order to appreciate the controversy in this case, it
was highlighted before us that since the inception of the
bank, separate department-wise and group-wise seniority for
promotion to the cadre of officers and non-officers were
maintained by the bank.

In 1972, following with recognised union, a combined
seniority list was maintained as a result of the settlement
and the two circulars A.C. Nos. 8 and 9 both dated 13th May,
1972. These are two annexures being Annexures 'A' and 'B' to
the special leave petition to this Court which are in the
Paper Book of this appeal. Annexure 'A' deals with the
scheme for combined seniority list and switchover from non-
clerical to clerical cadre. It is not necessary to set out
in extenso the detailed scheme. In this scheme all employees
in Class III non-clerical cadre substantively in the
categories that have been listed as groups I, III, IV and V
in the annexure who were graduates or had passed both parts
of Institute of Bankers Examination would be eligible to
exercise an option in accordance with sub-clause (a) or (b)
of clause 2 to be transferred, automatically and without any
screening, to posts in the clercial cadre and also to vacant
and other posts than purely stop gap or short term nature,
subject to sub-clause (b) mentioned in the scheme. Combined
seniority scheme introduced by the Reserve Bank to equalise
opportunity of confirmation and promotion of class under the
optee scheme came up for consideration by this Court in

Reserve Bank of India v. N.C. Paliwal & Ors.
, (supra). There
the Court noted that at every centre of the Reserve Bank of
India, there were five departments, the General Department
and four Specialised Departments. There was a separate
seniority list for the employees in each Department at each
centre and confirmation and promotion of employees was only
in the vacancies arising within their Department at each
centre. There were two grades of clerks in each Department,
namely, Grade I and Grade II. The pay scales of Grade I and
Grade II clerks in all the
departments were the same and their conditions of service
were also identical. There was automatic promotion from
Grade II to Grade I. It is not necessary to set out in
details the consequences. But it may be mentioned that this
optee scheme gave rise to dissatisfaction amongst the
employees in the General Department and they claimed equal
opportunities for having combined seniority but justified a
separate seniority list on the ground that work in each
Department was of a special nature and their
interchangeability was undesirable and hard to achieve. As a
result of the recommendations of the National Tribunal,
however, the Reserve Bank introduced the optee scheme 1965
as a first step towards equalisation of opportunity. Under
the scheme, the option to go over to the specialised
Department was confined to confirmed Grade II clerks and
officiating Grade I class in the general department. If he
exercised option, he was eligible to be selected. If he was
selected, he would be entitled to be absorbed only as Grade
II clerk in one of the specialised departments with the
result that if he was an officiating Grade I in the General
Department at the time of the exercise of the option, he
would lose the benefit of officiation in Grade I in the
general department as also the monetary benefit of Rs. 15.
His seniority in the cadre of Grade II clerks in the
specialised department in which he was absorbed would be
determined on the basis of his length of service calculated
from the date of his recruitment if he was a graduate when
he joined service, or from the date of his graduation if he
became a graduate whilst in service.

The petitioners
in that case
and some others were, at
the time of introduction of the Optee Scheme, confirmed
Grade II clerks in the general department and some of them
were officiating in the general department as Grade I
clerks. They exercised the option under the Optee Scheme and
were absorbed substantively as confirmed Grade II clerks in
one or the other of the specialised departments. The clerks,
other than the petitioners were, in due course, in order of
seniority, promoted as officiating Grade I clerks in their
respective specialised departments. But before the turn of
the petitioners for promotion came, a new Scheme was
introduced on 13th May, 1972 as a result of continuous
agitation by the employees for full equalisation of
opportunities between the general department and the
specialised departments. The
scheme was known as the Combined Seniority Scheme, and it
superseded the Optee Scheme. It consisted of two parts as
mentioned hereinbefore. One part provided for the
integration of the clerical staff of the General Department
with the clerical staff of the Specialised Departments, this
is annexure 'A' of the present Paper Book and the other
which is annexure 'B' in the present Paper Book for the
integration of the non-clerical staff with the clerical
staff in all the Departments. The Combinted Seniority Scheme
gave an option to the non-clerical employees to be
transferred to posts in the clerical cadre, but in the
interest of efficiency, prescribed a qualification that only
those employees in non-clerical cadre would be transferred
who were either graduates or had passed both parts of
Institute of Bankers' Examination. For determining their
seniority vis-a-vis those in the clerical cadre, the
Combinted Seniority Scheme adopted the rule that 1/3 of
their total non-clerical service until 7th May, 1972 (the
date on which agreement was reached at between the Bank and
its employees on the terms of the Combined Seniority Scheme)
or the date of acquiring the qualification should be taken
into account.

Allowing the appeal from the High Court and upholding
the validity of the Combined Seniority Scheme, this Court
held that assuming that the Reserve Bank was State under

article 12
of the Constitution and therefore, subject to

articles 14
and
of the Constitution, by the mere
introduction of the Optee Scheme, no promise or assurance
could be spelt out on the part of the Bank not to take any
steps towards integration of other employees not covered by
the Optee Scheme. The Reserve Bank, could not, on any
principle of law or by any process of implication, be held
bound to hold its hands in the matter of further
integration, until the petitioners were promoted in the
Specialised Departments. The only object of the Optee Scheme
was to equalise the promotional opportunities of Grade II
clerks in the General Department with those of Grade II
clerks in the Specialised Departments by giving an option to
the former to be absorbed in the latter. The object was
carried out as soon as the petitioners and other Grade II
clerks in the General Departent opted to be transferred to
the Specialised Departments. Then they became Grade II
clerks in the specialised departments having the same
promotional opportunities as the original Grade II clerks in
the
specialised departments. There was no assurance given by the
Bank that the promotional opportunities available to Grade
II clerks in the Specialised Departments would not be
diminished. This Court in
the said decision
was of the view
that the Combined Seniority Scheme did not affect the
promotional opportunities of all Grade II clerks in the
Specialised Departments, irrespective of whether they were
original or transferee Grade II clerks. It did not
discriminate between transferee Grade II clerks and original
Grade II clerks. There was no breach of the principle that
the promotional opportunities of transferee Grade II clerks
should be equal to those of original Grade II clerks. The
fact that some of the Grade II clerks, junior to the
petitioners, had become Grade I clerks in the general
departments, and so could be equated only with Grade I
clerks in the specialised departments was a wholly
fortuitous result, according to this Court. This Court noted
that it might cause heart-burning amongst the petitioners
that they were still continuing to be Grade II clerks but
whenever services were integrated, some hardship was bound
to result as a necessary consequence of integration. This

Court further held
that Reserve Bank did not undertake that
it would not take any steps for bringing about total
integration of the clerical services until all the
transferee Grade II clerks were promoted. The Bank was
entitled to introduce the Combined Seniority Scheme at any
time it thought fit and its validity could not be assailed
on the ground that it was introduced at a time when some of
the transferee Grade II clerks still remained to be promoted
and so was discriminatory against them.
The fact that some
transferee Grade II clerks had already obtained promotion as
Grade I clerks in the Specialised Departments by the time
the Cabinet Seniority Scheme was introduced, was all part of
the exigencies of service and in law no grievance could be
made against it.

The integration of different cadres into one cadre
could not be said to involve any violation of the equality
clause, according to this Court. Therefore, the first part
of the scheme for combination stands affirmed by this Court
in
N.C. Paliwal
's case (supra).

It may be mentioned that it is the case of the Bank
that the settlement and the circulars namely Circulars Nos.
8 and 9 referred to hereinbefore both dated 13th July, 1973
were the
culmination of a long process of negotiation and assessment
by the bank. Reference was made to the observations in the
Award of the National Tribunal presided over by Justice K.T.
Desai.
Indeed, this court referred to
the said decision
of
Justice K.T. Desai at page 382 and quoted from the said
report. Justice Desai had observed that it was desirable
when it was possible, without detriment to the Bank and
without affecting the efficiency, to group employees in a
particular category serving in different departments at one
Centre together for the purpose of being considered for
promotion that a common seniority list of such employees
should be maintained. The same would result in opening up
equal avenues of promotion for a large number of employees
and there would be lesser sense of frustration and greater
peace of mind among the employees.

These observations of the
National Tribunal were also approved by this Court in
All
India Bank Employees Association v. Reserve Bank of India
,
[1966] 1 S.C.R. 25 at 57.

In
Reserve Bank of India v. N.C. Paliwal & Ors.
,
(supra), at page 385 of the report, it was observed, inter
alia, as follows :

"The Association continued to agitate for
acceptance of its demand and ultimately, as a
result of negotiations, an agreement dated 7th
May, 1972 was arrived at between the Reserve Bank
and the Association by which the demand of the
Association was substantially conceded and the
principle of a combined seniority list was
accepted by the Reserve Bank. The petitioners and
some other employees were, however, not members of
the Association and they refused to accept the
terms of this agreement and hence the Reserve Bank
issued a Circular dated 13th May, 1972 introducing
a Scheme for combined seniority list and switched
over from non-clerical to clerical cadre with
effect from 7th May, 1972. This Scheme was
substantially in the same terms as the agreement
dated 7th May, 1972 and we shall hereafter, for
the sake of convenience, refer to this Scheme as
the Combined Seniority Scheme.
It may be mentioned as was placed before us that before
a combined list at the centre was introduced, the provision
was based on department-wise seniority at each centre and
the working of the Reserve Bank department-wise had been
explained in the
Paliwal
's case by this Court at pages 380
and 381 of the report.

It may be mentioned that the Circular
AC-9 dated 13th May, 1972 which was issued as mentioned
before following the statutory settlement dated the 7th May,
1972 under
section 18(1)
of the Industrial Disputes Act,
1947 was upheld in
Paliwal
's case at page 380-382. This
Circular was not challenged before the Bombay High Court.
The resulting position is that the centre-wise seniority is
the established position and whatever promotions have to be
effected must be based on the centre-wise seniority,
according to the appellant. The other part of the Circular
i.e. Circular AC-8 dated 13th May, 1972 only laid down
certain procedural aspects of promotion from clerical to
non-clerical (Officer cadre) and even if any part of
Circular AC-8 was set aside, it would not substantially
affect the stand of the appellant Bank that the promotions
are and would be made on the basis of combined seniority. It
is the case of the Bank that the principle of centre-wise
seniority was evolved after considerable discussion and
debate with all the concerned interests, viz.

who were
represented by the recognised union, i.e, the All-India
Reserve Bank Employees' Association and all the view points,
according to the Bank, were considered by the National
Tribunal and this Court had, as mentioned hereinbefore, in
the two decisions on two different occasions, upheld the
validity of the combined seniority scheme; namely
All India
Reserve Bank Employees' Association v. Reserve Bank of
India
, at page 57 and
Reserve Bank of India v. N.C. Paliwal
,
(supra) at pages 380-382.

Indeed in the last mentioned case at page 394, the
validity of the combined seniority list has been
subsequently upheld by this Court.

The controversy in this appeal lies within a narrow
area but it has been urged against a vast compass and
necessarily would require examination of some aspects which
are strictly not germane to the present issue.

It has to be borne in mind as has been mentioned
herein-
before that A.C. 9 dated 13th May, 1972 has received the
acceptance and approval of this case in
Paliwal
's case and
A.C. 9 and A.C. 8 form an integral part of the promotion and
regulation of the employment of the staff.

It was further emphasised from the point of view of
justice and fairness that for a large majority of employees
of the Bank, the maintenance of centre-wise seniority was
essential. If Class III clerical and non-clerical staff are
treated as an All-India cadre, both the employees as well as
the Bank would find themselves in a difficult position
because the employees will render themselves to be freely
transferable from one area to another and particularly for
those employees who are being transferred outside Bombay,
Calcutta and Delhi, may find it extremely difficult,
according to the Bank, to get housing accommodation (as the
Bank woud not be in a position to offer housing
accommodation to all its employees). In such a situation, it
was submitted, it would become a problem of discipline for
enforcement of transfer made if the same is refused by the
employees. It was, therefore, in those circumstances that
taking a pragmatic view the Bank had so far not insisted on
establishing an All-India cadre as far as the non-officer
staff was concerned. To add to the problem of accommodation,
there would be the problem of children's education at the
new centres. The integration of various centre-wise grades
into one All-India grade would also pose considerable
administrative problems.

In
V.T. Khanzode v. Reserve Bank of India
, (supra), it
was noted that the private interest of employees of public
undertakings should not override public interest and an
effort had to be made to harmonize the two considerations.
No scheme governing service matters could be foolproof and
some section or the other of employees was bound to feel
aggrieved on the score of its expectations being falsified
or remaining to be fulfilled. Arbitrariness, irrationality,
perversity and mala fide will, of course, render any scheme
unconstitutional but the fact that the scheme does no
satisfy the expectations of every employee was no evidence
of these. It was further observed that the contentions of
variations of the service rules had to be judged in the
light of the historical data governing the constitution and
Management of the Services under Reserve Bank of India from
time to time. Without an
awareness of the history leading to the events which the
petitioners have challenged as unconstitutional, it would
not be possible either to apprciate the position or to
provide an answer to it. These observations were made in
connection with the evaluation of integrated seniority list
for the officers Grade B and above.

In
Kamal Kanti Dutt & Ors. v. Union of India & Ors.
,
[1980] 3 S.C.R. 811, at pages 841-842 this Court emphasised
that in matters like formulation of seniority list where, in
respect of the rules of promotion, more than one view was
possible and that a choice had to be necessarily conditioned
by several considerations ensuring justice to as many as
possible and injustice to as few, it was not safe to test
the constitutionality of service rule on the touch stone of
fortunes of individuals.

This Court had also observed that the right of
promotion should not be confused with mere chance of
promotion. Though the right to be considered for promotion
was a condition of service, mere chances of promotion were
not. See Mohd. shujat Ali v. Union of India, [1975] 1 S.C.R.

449. See also in this connection the observations in R.S.
Deodhar v. State of Maharashtra, (supra) at p. 230 and

Reserve Bank of India v. C.T. Dighe
, [1982] 1 S.C.R. 107 at
121-122.

It is apparent, therefore, that the chances of
promotion in some areas occur more often in smaller centres
than in other bigger centres like Bombay, Calcutta, Delhi
but that is fortutious and would not really affect the
question, and violate
articles 14
and
of the
Constitution. The justice of the case should be judged in
conjunction with other factors, the convenience, the future
of the family etc.
The High Court proceeded, inter alia, on the basis that
the fact that Class III employees of the Bank belonged to an
All-India cadre freely transferable from one place to
another.

Regulation 31
of the Reserve Bank of India (Staff)
Regulations, 1948 which is in Chapter IV namely; Conduct,
Disciplince and Appeals, is as follows :

"Unless in any case it be otherwise distinctly
provided, the whole time of an employee shall be
at the disposal of the Bank, and he shall serve
the Bank in its business in such capacity and at
such place as he may from time to time be
directed."

Regulation 31
as indicated is subject to the condition
that 'unless in any case it be otherwise distinctly
provided'. In the instant case, it has been distinctly
provided in the appointment letters as to where the Class
III employees of the Bank are liable to serve. See for
instance, the specimen copy at page 107 of the Paper Book
which clearly, inter alia, provides as follows :

"He/She is liable to be posted either as Coin-Note
Examiner Gr.II or as Clerk Gr.II in any of the
department of the Bank at Bombay (Fort) or Byculla
Offices."

All appointment letters issued to all staff members
appointed in Class III and below ever since the inception of
the Bank contained, according to the Bank, identical or
similar provision specifying the offices in which of the
Bank these employees are required to work. It appears,
therefore, there was definite provision contrary to as
contemplated by
Regulation 31
of the Reserve Bank of India,
(Staff) Regulation 1948 and therefore the general provisions
of
Regulation 31
would not have any application. In
contrast, the appointment letters issued to the officers had
always invoked general provisions of
Regulation 31
giving
full power to the management of the Bank to post or transfer
the officers in any office situated in India. For this
purpose, specimen appointment letter to an officer in Grade
A may be referred to. See in this connection pages 98 to 108
of the paper book wherein it is stated in (xi) as follows:

"Posting and liability for transfer:

You are liable to be posted in any of the offices
of the Bank and to work in any of its departments
or the departments/offices of its associate
institutions as the Bank may decide. You will also
be liable for transfer to any place in India as
the Bank may decide from time to time without
payment of any allowance other than travelling
allowance."
It was further submitted and it appears that there is
good deal of substance in this that if an All-India cadre is
enforced in respect of Class III employees, it would result
in injustice to all the employees in that class at the
smaller centres for a considerably long period of time
leading to industrial unrest. The result of applying the
principles of an All-India cadre for this class of employees
would be that the senior-most in that whole cadre All-India-
wise would alone have to be considered for promotion. In
such a case, for a considerable long time, only employees of
the older offices, namely, Bombay, Nagpur, Madras, Calcutta
and Delhi will have to be considered, they being by far
senior-most among the All-India employees and such a
consideration and empanelling would continue for a very long
time as the principal basis of the settlement was not one of
promotion on merit but rather an upgradation on mere
seniority, the only qualification being an examination to
determine fitness. Once fitness was determined by the
examination, the ranking in that examination did not come
into play thereafter and the successful candidates were
again listed according to centre-wise seniority in the
matter of upgradation and promoted as and when vacancies at
that centre occur. It was submitted that the recruitment of
Class III employees at the lowest grade was made centre-wise
by the Managers of the offices concerned and not from one
source at the centre as such recruitment would be
administratively not feasible, to be undertaken.

It has to be borne in mind in deciding the controversy
in this case that in the course of this litigation on or
about 20th October, 1982, this Court by an order suggested
the appellant Bank that it might frame a new scheme for
promotion, removing as far as possible any imbalances that
might be existing in the prevailing scheme. The appellant
Bank, thereafter, made certain suggestions which were not
acceptable to all the unions and more particularly to the
recognised union. In the circumstances, the Bank could not
proceed with the suggested scheme.

Thereafter, the officers of the appellant Bank held
discussions with the representatives of the recognised union
viz., the All-India Reserve Bank Employees' Association, and
further modified the scheme agreed to under the settlement
dated 7th May, 1972.
As a result of the discussion with the employees of the
Bank, certain decisions were taken regarding the principles
governing recruitment and promotion for staff officers Grade
A. There are in the affidavit affirmed on 22nd February,
1983 by Shri Pradeep Madhav Joshi, the Joint Chief Officer
in the Personnel Policy Department of the Reserve Bank of
India along with the letter dated 21st February, 1983.

It was stated therein that the principles governing
recruitment and promotion for Staff Officer Grade A evolved
in 1972 be, subject to the approval of this Court, modified
on the following terms; "(i) 10% of the vacancies of Staff
Officers Grade A. will be filled in exclusively by direct
recruitment. However, such of the members of the staff who
comply with the eligibility requirements as might be
prescribed from time to time for direct recruitment, subject
to relaxation in respect of age requirement as the Bank may
decide, will be eligible to compete in the selection test.

(ii) Of the remaining 90% of the vacancies, 75% thereof will
be filled in on the basis of a written examination i.e.
qualifying test in accordance with the scheme for
promotions: Staff Officers Grade A annexed to Administrative
Circular No.8 dated 13th many, 1972 subject to the
conditions that no employee will be admitted to the
qualifying test at any centre unless he has put in a minimum
qualifying period of service of three years in clerical
grade as on a notified dated.

(iii) The residuary portion, i.e. 35% of the 90% of the
vacancies or in other words 22-1/2% of the total vacancies
to the post of Staff Officers Grade A would be filled in on
the basis of an All-India Merit Test to be prescribed by the
Bank in consulation with the Reserve Bank of India Services
Board ordinarly, and employee who had put in a minimum of 9
years' service in Class II would be eligible to take the
test. If, however, sufficient number of employees with 9
years' service were not available at any point of time, the
Bank might suitably reduce the conditions of qualifying
service so that candidate to the extent of at least thrice
the number of vacancies are available for the test.
Notwithstanding such reduction in qualifying service
necessitated in the circumstances indicated, in the case of
non-clerical staff who are non-graduates, they would,
however, be eligible for taking the
test only on completion of 9 years service. Successful
candidates would be empanelled in the central panel in order
of their comparative merits and they would be considered for
posting in order of their position in the central panel as,
when and where, the vacancies to posts of Staff Officer
Grade A in any of the offices of the Bank might arise."

The appellant Bank addressed a letter to the
Association incorporating the aforesaid decision of the
appellant Bank on the modification of principles governing
recruitment and promotion for Staff Officer Grade A and the
Association has, by its letter confirmed the same.

It was submitted on behalf of the Bank that the
modified scheme envisages appointment of a candidate for the
post of Staff Officer Grade A through holding three
different test, viz. (i) qualifying test on the basis of
centre-wise seniority and estimation of vacancies of Staff
Officers Grade A for each centre, (ii) merit test for all
employees with a minimum length of service of 9 years on
all-India basis. Successful candidates who will be
empanelled in the central panel in order of their
comparative merits would be considered for posting in order
of their position in the central panel, as, when and where
the vacancies to the post of Staff Officers Grade A in any
of the offices of the Bank might arise; and (iii) Selection
test for direct recruitment of candidates for Staff Officer
Grade A for inducting fresh blood for Staff Officer Grade A
which is the base level of officer and first level of
supervisory cadre. It was submitted on behalf of the Bank
that the modified scheme achieved just balance keeping in
view the interest of the employees as a class i.e. both of
senior and experienced employees and junior and qualified
employees on the one hand and the interests of the Bank on
the other. It was further stated that earlier, 82-1/2% of
the vacancies were allotted to be filled on the centre-wise
basis. Under the modified Scheme, the percentage was brought
down to 67-1/2. It was necessary to make gradual change as
the total change in the existing procedure would have
created industrial unrest and would have led to other
imbalances in operation.

Further it was submitted that the modified scheme
provided that no employee would be admitted to the
qualifying test at any centre unless he has put in a minimum
qualifying
period of service of three years in clerical cadre as on a
notified date. It was submitted on behalf of the Bank that
one of the factors that influenced the High Court in the
judgment under appeal was that raw junior employees from
Bhopal Office were eligible to appear for the qualifying
test, as apparent from the decision under appeal. It was
submitted that with the modification, no employee who had
put in less than three years of service would be admitted to
the qualifying test and the grievance that even temporary
and junior employees would become eligible would no longer
survive.

The correctness or otherwise of the decision of the
Bombay High Court in the light of the modified scheme has to
be judged from various angles.

On behalf of the opposing respondent, Shri C.N.
Sahasranaman made his submissions orally in person. He
submitted that at pages 296 to 299, 306, 307 and 310 of the
Paper Book, the appellant had admitted that the impugned
scheme of promotions had led to serious imbalances in
opportunities for appearing at the examinations. With this
admission, it was urged by respondents appearing in person
that the question of law raised by them in their affidavit
have been concluded by themselves and therefore they could
not have any grievances whatsoever against the impugned
judgment of the Bombay High Court. It was submitted that
matters relating to the imbalances contained by the impugned
Circular No.8 had already been considered at length by this
Court and this Court had directed on 20th October, 1982 to
formulate a new policy removing the imbalances in the
impugned policy.

It was submitted by the opposing respondents that
equality right of Class III employees which was an All-India
Institution would be affected even in the modified scheme
suggested by the Bank. It was urged that it would be
destructive of the All-India stature of the Reserve Bank of
India.

The main grievance of the respondents was that there
was violation of the constitutional right and it will hamper
development of an All-India Institution and All-India cadre.

Regarding reference to the case of N.C. Paliwal, it was
submitted on behalf of the opposing respondents that this
Court had not struck down the impugned circular on the
ground that it did not ensure equality of chances of
promotion but on the ground that the scheme did not ensure
equality of opportunity to be considered for promotion. The
equality of chances of promotion and the equality to be
considered for promotion, according to the respondents, are
two different questions and the grievance of the respondents
was that there was denial of equality to be considered for
promotion.

Whether there has been denial of equality of the view
of promotion or any constitutional right infringed or not
cannot be judged, where interest of large number of people
are concerned, in the abstract. Vast majority, indeed the
overwhelming majority of the workmen are in favour of the
scheme as evolved by the Bank as modified as it would be
apparent from the submissions urged on behalf of All-India
Reserve Bank Employees' Association impleaded as party-
respondent in this appeal as well as All India Reserve Bank
Employees' Federation, Hyderabad. It has to be borne in mind
that in service jurisprudence there cannot be any service
rule which would satisfy each and every employee and its
constitutionality has to be judged by considering whether it
is fair, reasonable and does justice to the majority of the
employees and fortunes of some individuals is not the touch-
stone. See in this connection the observations of this Court
in
Kamal Kanti Dutt & Ors. v. Union of India and Ors.
,
(supra).

Furthermore it appears to us that Circular No.9 is a
counterpart of Circular No.8. Circular No. 8 having been
held valid, Circular No. 9 must also follow to be good.
Circular No. 8 cannot stand in vacuum and in isolation. It
is a step to the fulfilment of the object to be achieved by
Circular No. 9. Viewed in that point of view and as a
feasibility and having regard to the factors and in regard
to the history of Reserve Bank employees, we are of the
opinion that the scheme as modified by the Bank and as
accepted by vast majority of their employees is a proper and
just scheme and does not suffer from the vice of
article 14

or
article 16
or any other constitutional guarantees.

It is well to bear in mind the fact that settlement of
disputes by direct negotiations or settlement through
collective bargaining is always to be preferred for it is
best suited for industrial peace which the aim of
legislation for settlement of labour disputes. See the
observations in
New Standard Engineering Co. Ltd. v. N.L.
Abhyankar and Ors., A.I.R.
1978 S.C. 982 at 984 = [1978] 2
S.C.R. 798.
This view has again been reiterated by this
Court in Tata Engineering & Locomotive v. Their Workmen,
A.I.R. 1981 S.C. 2163 = [1982] 1 S.C.R. 929. The order of
this Court dated 2nd May, 1984 and the referendum and the
result thereof have been set out hereinbefore.

We may, however, note that about the proper manner of
holding this referendum, certain doubts were expressed at
the time of hearing of this appeal. The Referendum
undoubtedly indicates that majority of the employees are in
favour of acceptance of the modified settlement. In matters
of service conditions, it is difficult to evolve as ideal
set of norms governing various conditions of services and in
grey area where service rules operated, if more than one
view is possible without sacrificing either reasons or
common-sense, the ultimate choice has necessarily to be
conditioned by several considerations ensuring justice to as
many as possible and injustice to as few. See in this
connection the observations in
K.K. Dutta v. Union of India

(supra) at page 841. These principles, however significant,
do not authorise the majority of the employees to trample
upon the constitutional guarantees or rights of the
individual or minority employees. Majority cannot thwart or
barter away the constitutional rights of the minorities. The
constitutional guarantees are to protect this very danger.
But in judging the content of the constitutional rights, the
entire perspective of the equality of opportunity here and
denial of equal right in public employment have to be viewed
in a fair, reasonable and just perspective. Viewed in that
light, it is true, there may be individual instances
exemplifying injustice by postponing or delaying the chances
of promotions of the contesting respondents yet that does
not deny them their constitutional right in its proper
measure, and the considerations that have weighed with the
making of the modified scheme and in the light of the other
considerations mentioned hereinbefore, we must observe that
with whatever care and objectivity or foresight any rule is
framed, some hardship, inconvenience or injustice might to
result but the
paramount consideration is the reconciliation of the
conflicting claims of two important constituents of service
one which brings fresh clerical employees and the other
mature experience. There has been a happy merger of these
two considerations in the scheme proposed and in that
merger, no violation of the guaranteed rights of the
opposing respondents have occurred.

It has further to be borne in mind that the promotion
scheme having been evolved after careful consideration and
having been in operation ever since the inception of the
Bank with modification from time to time as a result of the
negotiations under the
Industrial Disputes Act
should not be
modified drastically. In such matters one should hasten
slowly.

In the premises we affirm the scheme as modified by the
second modification referred to hereinbefore in the letter
dated 21st February, 1983 and as explained in the affidavit
of Pradeep Madhav Joshi filed on 22nd February,- 1983. We
further direct that the adhoc promotions made under the
directions of this Court in terms of the Order dated 22nd
May, 1984 be regularised. The opposing respondents have
appeared in person and have made submissions. They have made
valuable contributions. The constitutionality of a scheme or
if there is a violation of a right can only be decided if it
is questioned.

In that view of the matter the opposing respondents
should be amply compensated. We award cost of Rs. 5000
jointly to them or if they are appearing singly then singly.
Amounts already paid by the Bank should be adjusted against
the amount to be paid. If more amounts than Rs. 5000 have
already been paid then nothing need be refunded or paid. The
decision of the Bombay High Court is set aside. The appeal
is allowed and the order of the Bombay High Court
substituted by the order mentioned hereinbefore.

Civil Misc. Petition No. 14834 of 1985 - application
for intervention and Civil Misc. Petition No. 14822 of 1985
application for impleading are allowed and are disposed of
along with the above order.

S.R. Appeal allowed.