Telangana High Court
Ptm Gopala Krishna vs State Bank Of India Sbi on 20 June, 2025
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 8538 OF 2018
O R D E R:
Heard Sri Prabhakar Sripada, learned Senior
Counsel representing Sri Setty Ravi Teja, learned counsel for
petitioners as well as Sri B.S. Prasad, learned Senior Counsel on
behalf of M/s Pearl Law Associates for the respondents.
2. The case of petitioners is that Respondent No.4 –
State Bank of India acquired five Associate Banks viz: (1) State
Bank of Bikaner and Jaipur, (2) State Bank of Hyderabad, (3)
State Bank of Mysore, (4) State Bank of Patiala, and (5) State
Bank of Travancore as per said Gazette Notifications dated
22.02.2017 which were to come into force from 01.04.2017. It
was mentioned in Clause 7 of the said Notification that
Employees of the Transferor Banks (Associate Banks) shall
become, from the effective date, an officer of, as the case may
be, of Transferee Bank (State Bank of India) and shall hold his /
her office of service therein on such terms and conditions as
may be approved by the Central Board of the Transferee Bank
(State Bank of India) and shall continue to work in accordance
there with. However, no terms and conditions of service were
approved by the Central Board, even though the effective date of
the operation of Gazette Notification was 01.04.2017. Two days
2
prior thereto, i.e. on 29.03.2017, Respondent No. 2 – Chief
General Manager (HR), State Bank of India, Corporate Centre,
Mumbai issued Option Letters to all the employees and officers
of the Associate Banks asking them to either accept the terms
and conditions contained in the Option Letters by exercising
option “A” or “B” or discontinue their services by exercising
option “C”. In other words, employees were told either to accept
Options A or B or resign immediately by exercising option C.
It is stated that this so-called option letter is
unknown to service jurisprudence. A permanent employee or
officer cannot be forced to resign if he or she does not like the
new terms and conditions imposed by the Management.
Moreover, the so-called offer of Employment Letter dated
29.03.2017 does not refer to any terms and conditions of service
approved by the Central Board of the Transferee Bank i.e. State
Bank of India. Therefore, it can be seen that Respondent No. 2
has no authority to unilaterally issue offer of employment letter
which are not sanctioned or approved by the Central Board of
the Transferee Bank. Respondent No.2 by himself cannot frame
service conditions, as service conditions have to be approved
only by the Central Board of the Transferee Bank. As per
Section 43 of the State Bank of India Act, 1955 (for short, ‘the
3
Act’), it is only the SBI which may appoint officers or other
employees. The bank acts through the Central Board as defined
under Section 2 (b). As per Section 17, the management of SBI
vests with the “Central Board” and not the “Chief General
Manager (HR)” i.e. Respondent No.2. Section 19 deals with
composition of Board. As per Section 19 (a), “Central Board”
consists of Chairman to be appointed by the Central
Government. Section 19 (b) provides such number of Managing
Directors, not exceeding four. Section 19 (ca) : one director,
from among the employees of the State Bank, who are workmen,
to be appointed by the Central Government in the manner
provided in the rules made under this Act. Section 19 (cb) : one
director, from among such of the employees of the State Bank,
as are not workmen, to be appointed by the Central Government
in the manner provided in the rules made under this Act.
Section 19 (d) : not less than two and not more than six
directors to be nominated by the Central Government, from
among persons having special knowledge of the working of co-
operative institutions and of rural economy or experience in
commerce, industry, banking or finance. Section 19 (e) : one
director to be nominated by the Central Government. Thus, it
can be seen that Respondent No.2 is not a member of the
4Central Board and he alone cannot frame the terms and
conditions of the employees.
It is stated further that a reading of the options
under Clause No.3 shows that the Employees of Associate
Banks have been subjected to hostile discrimination. Clause 3
(b) of the Annexure to offer letter, clearly says that Probationary
Officers and Trainee Officers in SBI will get four additional
increments, whereas Probationary Officers and Trainee Officers
of Associate Banks will not get those additional increments. In
other words, there is clear and blatant discrimination in the
matter of increments as far as Probationary Officers and Trainee
Officers of Associate Banks are concerned. Even, these four
increments also have the effect of 4 years only. Similarly,
Clause 3 (c) makes it blatantly clear that Special Compensatory
Allowance (SCA) and Special Balancing Allowance (SBA) paid to
the officers of SBI will not be made applicable to the officers of
the erstwhile five Associate Banks which were acquired by State
Bank of India with effect from 01.04.2017. Clause 3 (d), the
provisions of officiating allowance as applicable to the employees
of SBI will also be applicable to the employees of the Associate
Banks. Thus, it can be seen that the Respondent No.2 has
indulged in gross and blatant discrimination. While Clauses 3
5
(b) and (c) discriminate against the employees of the erstwhile 5
Associate Banks and the employees of the SBI, there is parity in
respect of Clause 3 (d) relating to officiating pay.
It is also stated, all the Gazette Notifications dated
22.02.2017 are identical. Clause 7 of the Gazette Notification
clearly indicates that after the effective date, permanent and
regular employees of Transferor Banks (Associate Banks) shall
become employees of the Transferee Bank (State Bank of India).
In other words, there cannot be any discrimination between the
employees of the erstwhile Associate Banks and those who
(State Bank of Saurashtra and State Bank of Indore) are already
in service in the SBI. Whereas, option letter dated 29.03.2017
issued by Respondent No.2 is totally and openly discriminating
against the erstwhile employees of Associate Banks on several
issues. It is stated that employees from five Associate Banks
should have become employees of the SBI cannot lose their
birth marks. Upon integration into common cadre, learned
counsel for petitioners relied on the following judgments:
I. Roshan Lal Tandon V. Union of India 1
II. The State of Jammu and Kashmir V. Shri Triloki Nath Khosa 2
III. Manmad Reddy V. Chandra Prakash Reddy 3
IV. Sivaguru v. State of Tamil Nadu 41
1967 SCC ONLine SC 70
2
(1974) 1 SCC 19
3
(2010) 3 SCC 314-B.
4
(2013) 7 SCC 335-S
6V. Gurmeet Singh v. State of Punjab 5
It is also stated that Clause 9 of the Gazette
Notification prohibits employees of the Transferor Banks
(Associate Banks) from approaching any Court, Tribunal or
other Authority which means the right of an employee for
redressal of grievance has been taken away by Clause-9 of the
Notification dated 22-02-2017. Any such Clause prohibiting an
employee from approaching any Court or Tribunal or other
Authority would be clearly violative of Article 14 of the
Constitution of India and the said Clause has to be struck down
suo motu.
It is also stated that previously, the SBI had
acquired State Bank of Saurashtra on 23-08-2008 and State
Bank of Indore on 28-08-2010. While acquiring State Bank of
Saurashtra, the terminal benefits, pension, gratuity, and Bank’s
Contribution to Provident Fund (with interest), were given to
them. It is apt to notice the following:
Section 2 (a) of the Terms & Conditions of Service
Applicable to Officer Employees of State Bank of Saurashtra
after acquisition of State Bank of Saurashtra by State Bank of
India is as under:
5
Civil Appeal Nos. 17529-17530 of 2017
7” All SBI terminal benefits are being made available to SBS
Employees for the sake of clarity, SBS employees will get pension,
gratuity and Bank’s contribution to Provident Fund (with interest) as
available to SBI employees from their respective date of joining in the
case of directly recruited officers/ date of confirmation in respect of
promotee officers in SBS”.
Similarly, while acquiring State Bank of Indore, the
same terminal benefits, pension, gratuity, and Bank’s
Contribution to Provident Fund (with interest), were given to
them as mentioned in Section 2 (a) of the Terms & Conditions of
Service Applicable to Officer Employees of State Bank of Indore
(SBIN) after acquisition of SB Indore by SBI. Therefore, the
officers of the Associate Banks had a legitimate expectation that
SBI would extend similar benefits to them based on past
practice.
Learned counsel for petitioners submits that the
Hon’ble Supreme Court in Navjyoti Coop. Group Housing
Society v. Union of India 6, held that, in the aforesaid facts the
Group Housing Societies were entitled to ‘legitimate expectation’
of following consistent past practice in the matter of allotment,
even though they may not have any legal right in private law to
receive such treatment. The same principle was reiterated by
the Hon’ble Supreme Court of India in the following judgments:
6
(1992) 4 SCC 477
8
3. State of Jharkhand v. Brahmaputra Metalics Limited, Ranchi 9
4. Army Welfare Education Society v. Sunil Kumar Sharma 10
It is the specific case of petitioners that
Respondents have not denied extending the benefits to the
officers of State Bank of Saurashtra and State Bank of Indore.
Therefore, it must be taken to be a past practice.
3. Petitioners filed I.A.No.2 of 2024 to receive the
documents which demonstrate that they are being actively
discriminated against. They filed payslip of an officer belonging
to Manager cadre by name Shi Rajesh Laxminarayan Gupta for
April 2024 of erstwhile State Bank of Saurashtra which shows
that an erstwhile officer of State Bank Saurashtra, now working
in SBI is getting Special Compensatory Allowance of Rs.450/-
and Special Balancing Allowance of Rs. 1,775/-. Whereas, it is
seen from the payslip of an officer belonging to same Manager
cadre i.e. petitioner No.3 of erstwhile State Bank of Hyderabad
now working in SBI is not getting the above said allowances.
Similarly, Sri P. Srinivas Goutham, presently working as
Assistant General Manager, erstwhile officer of State Bank of
Indore now working in State Bank of India who was appointed
7
(1999) 4 SCC 727
8
(2003) 3 SCC 485
9
(2023) 10 SCC 634
10
Civil Appeal Nos. 7256-7259,dated 09.07.2024
9
in the year 1988 has got to his credit, the Bank’s contribution of
Provident Fund as on date is now amounting to Rs.38,30,571/-
(Rupees thirty-eight lakhs thirty thousand five hundred and
seventy-one only). Sri Satyanarayana Lankisetti, presently
working as Assistant General Manager of State Bank of
Hyderabad now working in SBI who was appointed on
05.07.1987 has got to his credit Bank’s contribution of
Provident Fund as on date at Rs. 11,67,701/-. The erstwhile
officers of five Associate Banks acquired by SBI on 01.04.2017
have been deprived Bank’s Contribution of Provident Fund to
the tune of several lakhs of rupees each.
4. Learned counsel for petitioners submits that the
contention of Respondent bank that the erstwhile officers of
Associate Banks who are now absorbed into State Bank of India
have to be treated as “fresh officers” with fresh terms and
conditions, is impermissible. The status of employees of five
Associate Banks is to be treated as “CONTINUATION OF
EMPLOYMENT” and more so when SBI is calculating Pension
and Gratuity with effect from the initial appointment of officers
of respective 5 Associate Banks and calculating the Bank’s
Contribution of Provident Fund with effect from 01.04.2017, i.e.,
the date of acquisition by State Bank of India is not tenable, as
10
Pension, Gratuity and Bank’s Contribution of Provident Fund
are “DEFERRED WAGES” and payable on the date of
Superannuation of Officers. While the erstwhile officers of the
State Bank of Saurashtra and State Bank of Indore are getting
their pension, gratuity and Bank’s Contribution to Provident
Fund from their date of initial appointment, whereas the
erstwhile officers of the remaining 5 Associate Banks have been
deprived of Bank’s contribution of Provident Fund with effect
from the date of their initial appointment when they joined
respective 5 Associate Banks till the effective date of acquisition.
They are getting only Bank’s contribution of Provident Fund
from 01-04-2017. In other words they were made to forego the
erstwhile Bank’s contribution of Provident Fund component.
5. On the other hand, the case of respondents on the
point of locus of petitioners is that, Petitioner No. 1 was
proceeded with a Disciplinary Inquiry by the transferee bank for
the gross misconduct committed by him in the course of
employment with the Transferor Bank during which, it was
proved that he committed misconduct qua the charges and was
imposed with the punishment of removal from service and the
appeal having been dismissed, he preferred Writ Petition No.
13041 of 2020. This Court by order dated 03.05 2024 directed
11
the bank to consider to impose any lesser punishment than that
of dismissal and removal; then SBI preferred Writ Appeal No.
819 of 2024 which was also dismissed by the Division Bench
vide judgment dated 09.09.2024. Considering the said order,
the Disciplinary Authority, having independently reviewed the
earlier decision of removal from service, imposed the
punishment of “Compulsory Retirement” by order dated
13.11.2024 which was communicated to Petitioner No.1, who,
in the meanwhile, filed Review Application in Writ Appeal
through another counsel questioning the very submissions
made on his behalf by his earlier counsel who submitted that
the Bank can also impose the punishment of Compulsory
Retirement stating that such an instruction was not given by
Petitioner to his earlier counsel, but the Bank has denied such a
contention as the very Petitioner was present in the course of
such submission by his earlier counsel in the Court Hall. The
Division Bench was reported as to the decision taken pursuant
to the orders of the Learned Single Judge affirmed by the
Learned Division Bench and having recorded the submission,
the Division Bench dismissed the Review Petition. Thus, the
order of Compulsory Retirement attained finality. It is not out of
place to mention that Compulsory Retirement, a major
punishment, is lesser than the punishment of dismissal and
12
removal from service in law as the same is not stigmatic, albeit
the terminal benefits and pension are the same. Since petitioner
No.1 has not exercised his option while joining the services of
SBI, as envisaged by the offer letter, he will be paid the terminal
benefits of State Bank of India from the effective date. As
regards the status, in the light of the disciplinary action taken
as per Regulations of the Transferor Bank, he has no locus to
challenge the merger scheme or terms and conditions approved
by the Board of Directors of Transferor Banks and the Central
Board of the Transferee Bank and the Central Government and
Reserve Bank of India.
6. As regards the locus of Petitioner No 4 – a
registered Trade Union under Trade Union Act, 1926 which is
governed by the Bye-Laws framed under the Statute, as per
Bye-Law No. 28 as to the Legal Proceedings by which the
Federation being a Corporate Body may sue or be sued in the
name of its “General Secretary” of “All India State Bank Officers
Federation” or in the name of any other Person so authorized by
the Executive Committee of AISBOF in respect of its own rights
and interest and obligations. The writ affidavit on behalf of
Petitioner No. 4 in the cause title was stated to be represented
by its Vice-President Harshavardhan Madabhushi, AISBOF and
13
the subsequent affidavits filed by way of reply/Interlocutory
Applications by the other person in the capacity of Vice-
President, did not produce any resolution of Executive
Committee in proof of such of the All India State Bank Officers
Federation located at Chennai as then was having registered
Office at Chennai which is essentially to be represented by the
General Secretary of such Executive Committee Respondents
place reliance on the Division Bench judgment of Madhya
Pradesh High Court in Prabhat v. Barkatulla University,
Bhopal 11 which declined to entertain a Writ Petition filed on
behalf of the Association by a person who was not authorized to
initiate the legal process on behalf of the Association. The
Madhya Pradesh High Court reiterating the ratio in Prabhat’s
case (supra), in the case of Madhya Pradesh Sikshak Sangh
through its Joint Secretary against the State of Madhya Pradesh
was pleased to dismiss the Writ Petition and further in United
Private Hospitals Directors Association through its Vice-
President was pleased to dismiss at the threshold such Writ
Petitions since not been authorized by the
registered/unregistered incorporated or not bodies.
7. With regard to Petitioners 2 and 3, who are the
employees of erstwhile SBH, did not indicate at all as to what
11
ILR 2011 MP 1692
14
options they have exercised so as to exhibit their grievance. In
other words, it is lack of espousing a cause so as to adjudicate
the issues. It is stated from the records of Respondent Bank
that Petitioner No.2 retired on 30.05.2023 and opted the
terminal benefits of State Bank of India, as per option A, in
terms of which he would be entitled for Pension as of the SBI
Pension, Bank’s Contribution Provident Fund from the effective
date i.e. 01.04.2017 and Statutory Gratuity as payable under
Payment of Gratuity Act. Petitioner No. 3, on his
superannuation, was paid terminal benefits as chosen by him
and he is receiving pension as per his eligibility. Petitioners 2
and 3 in fact did not espouse any cause in their individual
capacities nor the grievance on the touchstone of Article 14 or
any right, and therefore the Writ Petition must fail on the above
objections.
8. With regard to material contentions of petitioners,
learned counsel for respondent bank submits that it is
necessary to refer to the following aspects of law and facts
which fundamentally estop petitioners by their conduct who
having opted pension in the place of contributory provident fund
which terminal benefit and service gratuity alone were in place
for all Public Sector Banks including Associate Banks of SBI.
15
The Pension Regulations introduced in 1995 at the request of
various employees’ Unions and Association of such Banks to
extend pension scheme to them were accepted by the Central
Government which was intended for all the employees, and an
option to be exercised by the employees of Public Sector Banks
and Associate Bank was mandated as PF optee or Pension optee
and substantial employees have opted for Pension and thereby,
forgone the entire employers contribution made towards PF
which scheme alone was in place and whoever have opted, have
consented for return of the employers’ contribution and
accordingly, the amount lying with the Trustees was transferred
to Pension Fund created Under the Scheme by each Bank.
9. All India Bank Employees’ Pension Regulations was
enacted during 1995, which was made applicable to all Public
Sector Banks including Associate Banks of State Bank, which,
however, does not apply to SBI as already there was scheme for
the employees of SBI as to payment of pension. After enactment
of Pension Regulations 1995, the employees of Public Sector
Banks and Associate Banks of SBI (Except SBI) were entitled to
exercise option either to choose for Pension OR Contributory
Provident Fund. All Public Sector Banks including Associate
Banks of State Bank were extended the option to opt for either
16
pension under Bank Employees Pension Regulations 1995 OR
Contributory Provident Fund as hitherto available to them.
Terminal Benefits in respect of Employees of all Public Sector
Banks including Associate Banks of State Bank before
introduction of Pension Regulations of 1995 are:
i) Contributory Provident Fund,
ii) Service Gratuity (computation of gratuity is one
month salary for each completed year of Service)”
10. It is more pertinent to mention here that Petitioners
1, 2 and 3 while in the service of SBH, Pension Regulations
1995 were notified by the Central Government applicable to all
the Nationalized Banks including Associate Banks of State Bank
of India which were carved out on account of the demand from
the employees of all Nationalized Banks including Associate
Banks of State Bank of India as there was no provision for
payment of Pension on superannuation and they opted for
Pension with the Transferor Bank within the timeline
prescribed. It is pertinent to note that if an employee opts for
Pension under the Pension Regulations, 1995, they may have to
forego their entitlement for Bank’s Contribution towards the
Provident Fund which was in the place of Pension. Having
exercised the right and by opting the Pension Scheme under the
Pension Regulations 1995 and foregone the amounts paid by
17
the employer/SBH towards the Bank’s Contribution towards
Provident Fund and transferred the Bank’s Contribution to the
Pension Fund created by the employer/SBH funds managed by
the Trustees, petitioners 1, 2, and 3 are estopped now to
contend that the benefit to be extended as is eligible by the SBI
employees who were otherwise inherently entitled to receive
both Bank’s Contribution as well as employees Contribution at
the time of superannuation.
11. It is submitted that the benefit of Contributory
Provident Fund as to the employers contribution and the usual
pension, however, is made applicable with effect from the date
notified by the Central Government ie. 01.04.2017 from which
date the employees of Associate Banks as per their option
exercised is deemed to have joined the services of SBI, by no
stretch of imagination can be said to be arbitrary or illegal
12. Learned Standing Counsel submit that as regards
the challenge to the acquisition vide GSRs which have a
statutory force having been approved by the Union Cabinet in
consultation with the Regulator RBI and such identical
challenges on earlier mergers/acquisitions of the Banks, the
Hon’ble Supreme Court and various High Courts have upheld
such mergers/acquisitions which are akın legislative acts. He
18
draws the attention of this Court to relevant portions of the
provisions contained in Section 35 of the 1955 Act.
” 35 State Bank May acquire the business of other banks –
(1) The State Bank may, with the sanction of the Central Government,
and shall, if so directed by the Central Government in consultation
with the Reserve Bank, enter into negotiations for acquiring the
business, including the assets and liabilities, of any banking
institution
(2) The terms and conditions relating to such acquisition, if agreed upon
by the Central Board of the State Bank and the directorate or
management of the banking institution concerned and approved by
the Reserve Bank, shall be submitted to the Central Government for
its sanction and that Government may by order in writing (hereafter
in this section referred to as the order of sanction) accord its sanction
thereto.
(3) Notwithstanding anything contained in this Act or any other law for
the time being in force or any instrument regulating the constitution
of the banking institution concerned, the terms and conditions as
sanctioned by the Central Government shall come into effect on the
date specified by the Central Government in this behalf in the order of
sanction and be binding upon the State Bank and the banking
institution concerned as well as upon the shareholders (or, as the
case may be, proprietors) and creditors of that banking institution
(4) If for any reason the terms and conditions cannot come into effect on
the date specified in the order of sanction, the Central Government
may fix another suitable date for that purpose
(5) On the date on which the terms and conditions as aforesaid come into
effect the business and the assets and liabilities of the banking
institution concerned as covered by the acquisition shall, by virtue,
and in accordance with the provisions, of the order of sanction stand
transferred to, and become respectively the business and the assets
and liabilities of the State Bank(6) The consideration for the acquisition of the business and the assets
and liabilities of any banking institution under this section may, if so
agreed upon, be paid either in cash or by allotment of shares in the
capital of the State Bank or partly in cash and partly by allotment of
shares, and the State Bank may, for the purpose of any such
allotment, increase, subject to the other provisions contained in this
Act relating to the increase of capital, the capital of the State Bank by
the issue of such number of shares as may be determined by the
State Bank.
(7) Any business acquired under this section shall thereafter be carried
on by the State Bank in accordance with the provisions of this Act,
subject to such exemptions or modifications as the Central
Government may, by notification in the Official Gazette, make in this
19behalf in consultation with the Reserve Bank.Provided that no such
exemption or modification shall be made so as to have effect for a
period of more than seven years from the date of acquisition.
(8) Notwithstanding anything contained in the Industrial Disputes Act,
1947 (14 of 1947), or in any other law or in any agreement for the
time being in force, on the acquisition of the business and the assets
and liabilities of any banking institution under this section, no officer
or other employee of that banking institution shall be entitled to any
compensation to which he may be entitled under that Act or that
other law or that agreement and no claim in respect of such
compensation shall be entertained by any Court, Tribunal or other
authority, if on his having accepted in writing an offer of employment
by the State Bank on the terms and conditions proposed by it he has
been employed in accordance with such terms and conditions.”
Thus, under the above substantive provision of law,
the acquisition has taken place which cannot be challenged on
any count of whatsoever nature, as such the power conferred on
Central Government, RBI and the State Bank of India is by
virtue of Statute and all the acts done pursuant to the said Act
are regarded as legislative acts which are very much within the
frame work of the Act.
13. With regard to the claim of four additional
increments which was provisioned for POs and TOs of SBI right
from the Recruitment Notifications, unlike the notifications
relating to recruitment of POs in subsidiary banks, it is useful
to refer to the judgment of the Hon’ble Supreme Court in
Associate Banks Officers Association v. State Bank of
India 12 which was moved challenging the parity in pay scales
12
(1998) 1 SCC 428
20
claiming terminal benefits/medical benefits and extra
increments on par with such benefits available to the employees
holding similar or equivalent ranks in the SBI. The Hon’ble
Supreme Court has elaborately discussed as regards the
establishment of SBI and the Subsidiary Banks under the
relevant Acts and the difference between the employees of SBI
and Subsıdıary Banks and the contention of the officers that
they are on par with the employees of SBI was declined and
upheld that the employees of the Subsidiary Banks are not
entitled to claim the same benefits as that of employees of the
SBI on the ground that they are not, in effect, the employees of
the SBI. The further grievance of the employees of the Associate
Banks that in respect of terminal/retiral benefits, the employees
of the Subsidiary Banks are entitled to Provident Fund or
Pension and to Service Gratuity and whereas the employees of
the SBI are entitled to Provident Fund and Pension apart from
Gratuity under the payment of Gratuity Act and therefore the
employees of the Subsidiary Banks should also be given Pension
in addition to the terminal benefits and that the terminal
benefits in a Subsidiary Banks are comparable to the terminal
benefits in Nationalized Banks, where also there is an option
between Pension or Contributory Provident Fund and the
employees of a Nationalized Bank are entitled to Service
21
Gratuity or Gratuity as per Payment of Gratuity Act which is the
position in the Subsidiary Banks also. Looking at the
comparison, the Hon’ble Supreme Court did not find any merit
in the contentions of Petitioners having found no discrimination.
It is quite useful to refer to Para 19 of the aforesaid precedent
which is relevant to appreciate the stand of the Respondent
Bank.
” 19. With regard to pay scales, the grievance which has been
made before us as of now, is only with regard to four increments which
are given to the officers of the State Bank of India at the time of joining
though the pay scales are the same. This is not done in the subsidiary
banks. The State Bank of India has submitted that in order to attract
suitable persons, looking to the scale of their operations and
responsibilities involved, this has been done. The subsidiary banks are
not in a comparable position. Nor are their scales of operation
comparable to the State Bank of India. The responsibilities of their
officers are not comparable in view of the extent of operations of the
subsidiary banks. In these circumstances, if the State Bank of India has
offered increments to persons joining the State Bank of India, the same
cannot be given to the officers joining the subsidiary banks.”
Though the Officers joining SBI and the Associate Banks,
the pay scales are the same, the increments as offered by the SBI to its
Officers (POS and TOs) with a view to attract the cream cannot be given
to the Officers joining the Subsidiary Banks Therefore, their claim for
extending four increments which were otherwise provided by the SBI to
the POS and TOs has been declined by the Hon’ble Court. Such an issue
decided by the Hon’ble Supreme Court cannot be allowed to reiterated
again and hit by doctrine of Resjudicata”
The Hon’ble Supreme Court in its concluding
paragraph while referring to the grievances which centre around
22the benefits, held that the employees of SBI and the Subsidiary
Banks are not in a comparable position and that the benefits
which were extended to the employees of the Subsidiary Banks
are negotiated settlements with the Unions and Associations of
their employees/officers and such benefits are conferred in
accordance with the agreements between the unions of the
employees and management of each bank and observed that the
principle of equal pay for equal work cannot be applied in the
case of claims of the officers of the Associate Bank.
14. Be that as it may, since the Scheme of Acquisition
and Merger is statutory-based scheme having the force of law
cannot be found fault with by an employee of the Transferor
Bank or by the Transferee Bank as after all, the mergers and
acquisitions are governed by a Statute, various incidence of
service since necessarily have to be followed by the employer
which have to be accepted by the willing employees who wish to
continue the services in the Transferee Organization. The Order
of Amalgamation of All the Associate Banks as to the Acquisition
of All Associate Banks by the SBI and the Central Government
having notified the same under the relevant GSR’s (Government
Statutory Rule) is a legislative one and such a policy of
acquisition or the service conditions empowered to be made by
23
both the Transferor and Transferee Banks through its Boards
cannot be simply challenged by an employee on assumptions
and presumptions and when the identical challenges were made
before the Hon’ble Supreme Court by the Officers Associations
invoking its jurisdiction under Article 32, though the challenges
were prior to the acquisition/amalgamation/merger, the ratio
decided, squarely applies to the present challenge.
15. It is useful to refer to the acquisition of State Bank
of Saurashtra and State Bank of Indore by the SBI under
similar orders vide GSR No. 589 (E) Ministry of Finance dated
13.08.2008 and vide GSR No. 638 (E) Ministry of Finance, dated
28 07.2010 which are having very same clauses like in the
present GSRs, clauses 7 and 8 which were assailed before the
Gujarat High Court and Madhya Pradesh High Court and as
regards the State Bank of Saurashtra, the High Court of Gujarat
was pleased to dismiss the claim with respect to the challenge to
the validity of acquisition, more particularly with respect to the
claim for four increments which is being extended to the POs
and TOs of SBI. The said orders were subsequently upheld by
the Hon’ble Supreme Court.
24
16. In BT Khanzode v. Reserve Bank of India 13, a
Three-Judge Bench of the Hon’ble Supreme Court, in the case of
integration of different groups or cadres by introducing common
seniority scheme in the larger interest on the basis of the
recommendations of experts committees, it was held that
individual cases of hardship and adverse effects will not render
the scheme unconstitutional unless arbitrariness, irrationality,
perversity or mala fides are established and it was further held
that the private interest of employees of public sector
undertakings cannot override public interest and an effort has
to be made to harmonize the two considerations and no scheme
governing service matters can be fool-proof and some section or
the other of employees is bound to feel aggrieved on the score of
its expectations being falsified or remaining to be fulfilled and
vested interest are prone to hold on their acquisitions and
finally held that the administration circular/the office order and
combined seniority list are not violative of the rights of the
Petitioner under Articles 14 and 16 of the Constitution.
17. In Tamilnadu Education Department v. State of
Tamilnadu 14, the Hon’ble Supreme Court held that in the
service jurisprudence, integration is a complicated
13
(1982) 2 SCC 7
14
(1983) 3 SCC 97
25
administrative problem wherein doing broad justice to many,
bruises to a few cannot be ruled out. Some play in the joints
even in some wobbling must be left to Government without
forensic monitoring since the administration has been entrusted
by the Constitution to the Executive, not to the Court. All life
including the administrative life, involves experiment, trial and
error but with the leading strings of Fundamental Rights, and,
absent unconstitutional excesses, judicial correction is not right
and it was also held that the Court is aware of the jurisdictional
limitations and did not agree with the arguments that the courts
can analyse such minutiae to fault the policy and quash the
orders of the Government. It was further held that surely the
policy is not static but it is dynamic; what weighed with the
Government when Panchayat Institutions were amalgamated
with the District Board Institutions might have been given in the
light of experience or changed circumstances and that the Court
cannot strike down a GO or a Policy merely because there is
variation or contradiction.
18. In Indian Airlines Officers Association v. Indian
Airlines Limited 15, the Hon’ble Apex Court held as under:
” 39. Where it is seen that the authorities were alive to the
service conditions of the Indian Airlines employees and had their future15
(2007) 10 SCC 684
26in mind also, the authorities were not bound to negotiate with the
appellant Association before formulating the policy such policy which is
framed without active negotiations with the appellant Association would
not (for that reason alone) be rendered non est and would suffer from
the vice of arbitrariness After all in ultimate policy which has been
culled out, we do not see any arbitrariness, on the other hand we find
the equities in between the Indian Airlines employees and SHOD
employees to have been properly balanced and counterbalanced. The
non-participation of the appellant Association, in our opinion, under the
peculiar facts and circumstances of this case would not be fatal to the
policy decision Where we have found the ultimate policy decision as also
the principles on the basis of which said decision is taken to be
blemishless, we would not choose to annihilate that decision and the
principles on the sole ground that the appellant Union was not heard”.
19. In BALCO Employees’ Union (Regd.) v. Union of
India 16, the Hon’ble Supreme Court opined that in case of
policy, the employees may suffer to certain extent, but such
sufferings should be taken to be incidence of service. Therein,
the Court observed as under:
” 48. Merely because the workmen may have protection of
Articles 14 and 16 of the Constitution, by regarding BALCO as a State, it
does not mean that the erstwhile sole shareholder vız. Government had
to give the workers prior notice of hearing before deciding to disinvest
There is no principle of natural justice which requires prior notice and
hearing to persons who are generally affected as a class by an economic
policy decision of the Government If the abolition of a post pursuant to a
policy decision does not attract the provisions of Article 311 of the
Constitution as held in State of Haryana v. Des Raj Sangar [(1976) 2
SCC 844: 1976 SCC (L&S) 336] on the same parity of reasoning, the
policy of disinvestment cannot be faulted if as a result thereof the16
(2002) 2 SCC 333
27employees lose their rights or protection under Articles 14 and 16 of the
Constitution.”
20. In the said case, the Hon’ble Supreme Court has
held in para 39, this is not the case where the natural justice is
brought in so as to hold that if the appellant association was
not made a party to the discussion for policy making, such
decision for making policy would be hit by the principles of
natural justice and it was further held that the authorities were
alive to the service conditions of the Indian Airlines and had
their future in mind, the authorities are not bound to negotiate
with the appellant association before formulating the policy and
the same would not render the policy non-est. In para 40, it was
opined that in case of policy, the employees may suffer to some
extent, then such sufferings should be taken to be the incidence
of service.
21. In Central Bank of India v. Madan Chandra
Brahma 17, the Hon’ble Supreme Court held in respect of the
claim of the employee of the transferor bank which provides
retirement age at 58 who sought to contend that the benefit of
retirement as provided in the transferee bank to the persons
who have joined in the bank before 19.07.1969 was negatived
as the employee in the transferee bank is deemed to be
17
(2007) 8 SCC 294
28
recruited on the date of merger ie 29.08 1990. In para 12 of the
judgement, the Hon’ble Supreme Court held that the right to be
treated on par with the employee of Central Bank of India is one
thing, the right to insist that the employee must be deemed to
have become employee of Central bank of India even before the
amalgamation is another.
22. In Small Scale Industrial Manufactures
Association v. Union of India 18, a three-judge bench in para
59 held that the scope of judicial review on the policy decisions
in the field of economy / economic policy decision / or the policy
decisions having financial implications which affect the
economy of the country are required to be considered. In para
60.1, it is observed that in the light of the consistent view that
the Court will not debate academic matters or concern itself
with intricacies of trade and commerce and further that it is
neither within domain of the Courts nor in the scope of judicial
review to embark upon an enquiry as to whether a public policy
is wise or whether a better public policy can be evolved and that
wisdom and advisability of the economic policy are not
ordinarily amenable to judicial review and economic and fiscal
regulatory measures are a field where judges should not
18
(2021) 8 SCC 511
29
encroach upon very warily as judges are not experts in such
matters.
23. It is not out of place to mention here that
acquisition of Associate banks by the State Bank of India
consisting of five banks was a policy and statutorily backed
legislative act and the terms and conditions formulated as the
power conferred on the Central Board which is conferred with
the power to formulate the service conditions and allied matters
which has a financial bearing on the Employer transferee bank.
Further, the Central Board which consists of the Chairman of
State Bank of India/Subsıdıary Banks and one of the Managing
Directors of SBI who represent all the Associate Banks as their
MD, Reserve Bank of India (RBI) Nominee, Central Government
Nominee and other nominees appointed by the Government of
India and such Board is Statutory Board under Section 19 of
the 1955 Act. It is not the grievance of petitioners that the pay
and allowances as were drawn are affected and that all of them
purporting to be representing the Transferor Banks namely Five
Associate Banks, the officer strength of those Banks was at
25,355 and the award Staff of them was found at around
44,835 who did not exhibit any grievance and the officers of all
these Banks through their Officers Federation through an
30
incompetent persons cannot challenge the Scheme on
assumptions and presumptions.
24. In Small Scale Industrial Manufacturers
Association (cited supra), in para 62, it is held that the
problems of Government are practical ones and may Justify if
they do not require, rough accommodation, illogical, if may be,
and unscientific and what is the best is not always discernible,
the wisdom of any choice may be disputed or condemned and
mere errors of Government are not subject to judicial review and
it is only palpably arbitrary exercise which can be declared void.
In para 66, while referring to the Judgement reported in (2000)
10 SCC 664, it was noted as observed in the said judgment that
the Courts in exercise of their jurisdiction will not transgress
into the field of policy decision. In para 77, it was held that the
circulars of RBI given in the facts of the case are in the realm of
the policy decision and if the relief sought for is granted, it
would seriously affect the banking sector. The larger view of the
Hon’ble Supreme Court and the ratio laid down consistently, the
scheme of amalgamation of five associate banks in 2017 is in
the wisdom of the Central Government and the Reserve bank of
India. The transferor and the transferee banks in exercise of the
powers conferred by the relevant statues namely State Bank of
31
India Act, 1955, State Bank Subsidiaries Act, 1959, Banking
Regulation Act, 1949 and Reserve Bank of India Act, 1935
which is virtually a legislative act and the terms and conditions
approved by the Central Board as provided by the acquisition
proceedings which are quite transparent and fair and
reasonable and all the officers of Associate Banks have
exercised their options and joined as per their choice.
Petitioners have no right to challenge the choice of exercise of
options and it is impermissible to contend that the benefit of
Contributory Provident Fund which was extended to employees
of State Bank of Saurashtra and Indore with effect from their
conformation in the Transferor Bank was in consonance with
the terms approved by the Central Board with the permission of
Central Government and RBI at the material time, and when
such benefit is conferred in the present acquisition effective
from 01.04.2017 cannot be assailed on the ground of
arbitrariness or on the unsustainable ground of legitimate
expectation as the present merger in the decision of the policy
maker did not envisage which is outside of the realm of judicial
review in the facts of the case
25. It is to be noted that at the time of earlier mergers
of two associate banks, it was provided in the terms and
32
conditions of the transferor Associate Bank and what policy
weighed in the mind of the administration about ten years ago
is purely a policy decision and such a policy decision cannot be
made to be applicable to subsequent acquisitions of the
remaining Associate Banks which have merged at a time in
2017, as the object was to bring efficiency in the banks and for
synergy in its operations.
26. Learned Standing Counsel for the Bank referred to
the Constitution Bench judgement in Roshan Lal TAndon‘s case
(supra) relied on by petitioners to state that the employees lose
their birth marks upon integration into common cadre which
dealt with the promotion of train examiners whose recruitment
into a particular grade by way of direct recruitment and the
promotees of artisans and when the recruits from both the
sources to Graded were integrated into one class and no
discrimination thereafter been made in favor of recruits from
one source as against the recruits from the other source in the
matter of higher promotions to Grade-C. The facts of the said
case which are dealt with one organization ie Railways has no
application at all and the subject case is a case of
amalgamation/merger of smaller organizations into a bigger
organization in terms of scheme approved by the Central
33
Government. In fact, the said judgment favors the stand of the
respondent bank. In para 6 for the argument of the employee
that the condition of the service was contractual and could not
be altered thereafter to the prejudice of the employee and the
Supreme Court held that the origin of Government service is
contractual but once appointed to the post or office, the
government servant acquires “Status” and his rights and
obligations no longer determined by the consent of both the
parties, but by the Statute/Statutory rules which may be
framed and altered unilaterally by the Govt. In other words, the
legal position of Government servant is more one of status than
of contract. The emoluments of servant and his terms of
services are governed by Statutory Rules which may be
unilaterally altered by the Government without the consent of
the employee. It is much more that purely a contractual
relationship voluntarily entered between the parties, the duties
of the Status are fixed by the law and in the enforcement of
these duties the society has an interest. In the language of
jurisprudence, the status is a constitution of membership of a
group of which powers and duties are exclusively determined by
law but not by the agreements between the parties concerned.
34
27. The Constitution Bench judgement of the Supreme
Court in Shri Triloki Nath Khosa‘s case (supra), was sought
to be relied on by petitioners to contend that the birth mark
make an employee takes in an organization on account of
subsequent classification loses such birth mark and continued
to be governed by the new rule as applicable with the
retrospective effect as to the benefits on par with the employees
in the transferee. But the Supreme Court noting the contentions
of the appellants, held that it is always open to the Government
to classify its employees, so long as the classification is
reasonable and has nexus with the object thereof, that a
classification can’t be held to infringe the equality clause unless
it is palpably arbitrary and that if there are different source of
recruitment, employees recruited from different sources can
either be allowed different conditions of service and to continue
to belong to different classes or the Government may integrate
them into one class and that once the employees are integrated
into one class, they cannot for purpose of promotion be
classified again into two different classes on the basis of
different classes existing at the time of recruitment. But, after
integration into one class, the employees can, in the matter of
promotion, be classified into different classes on the basis of any
“intelligible differentia” as for example educational qualifications
35
which has a nexus with the object of classification namely
efficiency in the post of promotion. It was held in the above
constitutional Judgment that Roshanlal‘s case is no authority
for the proposition that if direct recruits and promotees are
integrated into one class, they can’t be classified for the purpose
of promotion on basis of other than the one they were drawn
from different sources and in the instant case, classification
rests fairly and squarely and the consideration of educational
qualification that the graduates alone shall go to the higher post
no matter whether they are appointed as Assistant Engineer
directly or by promotion as there is no discrimination. It is not
in relation to the source of recruitment and while referring to
the case in Narsingh Rao rendered by the very same bench
which decided Roshanlal‘s case that higher educational
qualifications are relevant consideration for fixing a higher pay
scale and therefore, matriculate tracers could be given a higher
scale than non-matriculate tracers though their duties were
identical and there could be impediment in classifying them on
the same basis for promotion.In the light of the above two
constitutional judgements, when a policy is taken as regards the
service conditions of an employee, various factors can be
considered by the administrator as to the service conditions
including the difference in pay scales and also promotion on
36
different yardsticks. When an aggrieved employee challenges
alleging discrimination on the equality principle, the above two
constitutional bench judgements are quite clear and both the
judgements support the stand of respondents on the ratio.
28. Similarly in Chandra Prakash Reddy‘s case, the
Hon’ble Apex Court upheld the orders of the Tribunal/ High
Court and held that Note 6 to Rule 3 which deals with the
method of appointment and for the purpose of promotion was
held to be unconstitutional and the said ratio, in the matter of
promotions is not relatable to the so-called birth marks relied
on by petitioners. In Shiva Guru’s case (supra), it was held
that birth marks were obliterated by merger. Regarding the
integration of employees of NLEP into the MHWS, the Hon’ble
Supreme Court upheld the Judgement of the High Court
holding that the re-designated Health Inspector Grade-I ought
to have been given the scale of pay from the date of merger. In
fact, the SBI did not discriminate at all in the matter of terminal
benefits to be extended with effect from effective date of merger
ie. 01.04.2017 as the employees of Associate Banks are deemed
to be recruited as employees of SBI with effect from 01.04.2017.
In fact, the proposition laid in the judgment in relation to
promotion has no application as the case on hand is concerned
37
about extending the terminal benefits like contributory
provident (from the date of confirmation in the subsidiary
banks), SCA, SBA as applicable to certain employees of State
Bank of India who were on the rolls of State Bank of India as on
the relative cut-off dates which are much prior to the merger of
five subsidiaries and four advance increments as available to
the directly recruited POs. and TOs. in terms of the recruitment
policy of SBI which were not available to the POs. and TOs. of
Associate banks recruitment policy.
29. With regard to unreported judgement in Civil
Appeal 17529-17530 of 2017 (Gurmeet Singh v. State of
Punjab), which deals with the benefit of proficiency step up
which was directed to be extended to the appellants as the
appellants formed part of same establishment and were
similarly-situated to the employees who were granted the
benefits under proficiency step up scheme but whereas under
the very acquisition of Associate Banks has assured to the
employees that their pay and allowances are fully protected and
the merger of the organizations as far as the Associate Banks
are concerned, which are Statute based and as regards the
service conditions of the employees/officers of associate banks
are not at all affected and none of the cases relied on by the
38petitioners are relatable to issues raised by petitioners rather
support the stand of SBI as stated in preceding paragraphs.
30. With regard to the judgements on the legitimate
expectations, as already submitted, there is no requirement of
any consultation with the employees of the transferor bank or
the transferee bank at the time of acquisition/merger. The
decisions on the legitimate expectations are absolutely out of
context in the facts attendant to the present case. It is
significant to mention that absolutely the doctrine of legitimate
expectation sought to be relied upon by petitioners solely on the
ground when two subsidiary banks were acquired on the very
identical conditions in 2008 and 2010, the employees were
extended the terminal benefits with part of SCA called as SCA-2
and SBA to State Bank of Saurashtra alone as at the time of
determination of wage settlement under 9th bipartite settlement
and specific allocation of Rs.289.64 crores to the employees of
State bank of India including the staff strength of State Bank of
Saurashtra which was merged by then was also taken into
account However, no SCA and SBA is being paid to the
employees of State Bank of Indore as the eligibility and
entitlement of SCA & SBA are linked to the employees being on
the rolls of SBI as on 01.11 1993 / 23.07 2003 (in respect of
39
SCA) In respect of SBA the elıgıbılıty is linked to the employees
being in the rolls of SBI as on 31.10.2007.
31. The case relied on by petitioners in Civil Appeals
No. 7256-7259 of 2024 (Army Welfare Education Society v.
Sunil Kumar Sharma) after elaborately discussing the relevant
case law in relation of doctrine of legitimate expectation while
differentiating between legitimate expectations on the one hand,
anticipation wishes and desire has categorically observed that a
legitimate expectation is not the same thing as an anticipation
and it is distinct and different from a desire and hope and it is
based on a right. It is grounded in the rule of law as requiring
regularity, predictability and certainty in the Government
dealings with the public which operate in both procedural and
substantive matters and in para 48 have noted the features
regarding the doctrine of legitimate expectations.
a) First, legitimate expectation must be based on a right as opposed to a
mere hope, wish or anticipation
b) Secondly, legitimate expectation must arise either from an express or
implied promise, or a consistent past practice or custom followed by
an authority in its dealings
c) Thirdly, expectation which is based on sporadic or casual or random
facts, or which is unreasonable, illogical or invalid can not be treated
as a legitimate expectation
d) Fourthly, legitimate expectation operates in relation to both
substantive and procedural matters;
e) Fifthly, legitimate expectation operates in the realm of public law,
that is, a plea of legitimate action can be taken only when a public
authority breaches a promise or deviates from a consistent past
practice, without any reasonable basis.
40
f) Sixthly, a plea of legitimate expectation based on past practice can
only be taken by someone who has dealings, or negotiations with a
public authority. It cannot be invoked by a total stranger to the
authority merely on the ground that the authority has a duty to act
fairly generally.
It was further held by the Hon’ble Supreme Court
that legitimate expectation, jurisprudentially, was a device
created in order to maintain a check on arbitrariness. It does
not extend to and cannot govern the operation of the contract
between private parties wherein the doctrine of promissory
estoppel operates the field.
32. On the other hand, in Punjab Communications
Ltd. V. Union of India 19, the principle propounded by Lord
Diplock reported in 1985 AC 374 that for a legitimate
expectation to arise, the decisions of the administrative
authority must affect the person by depriving him of some
benefit or advantage which
(i) He had in the past been permitted by the decision maker to
enjoy and which he can legitimately expect to be permitted to
continue to do until there have been communicated to him
some rational grounds for withdrawing it on which he has
been given an opportunity to comment
(ii) He has received assurance from the decision maker that they
will not be withdrawn without giving him an opportunity first
of advancing reasons for contending that they should not be
withdrawn
19
(1999) 4 SCC 727
41
It was also observed that the substantive part of the principle is
that if a representation is made, a benefit of a substantive
nature will be granted or if the person is already in receipt of the
benefit, it will be continued and not be substantially varied,
then the same could be enforced. It was further held in para 19
that an expectation entertained by a person may not be found to
be legitimate due to the existence of some countervailing
consideration of policy or law. Administrative policies may
change with changing circumstances, including change in the
political complexion of Governments. The liberty to make such
changes is something that is inherent in our Constitutional
form of Government. In the instant case, the Central Board of
the Transferee bank has been vested with inherent power to
frame, approve and implement the policies preceded by
Government and RBI including RBI, directed by the GSR.
33. It may not be out of context to state that the
Memorandum of Settlements dated 22.07.2003 and 23.07.2003
with All India State Bank of India Staff Federation and All India
State Bank Officers Federations separately vide para 8, it was
reiterated that all those permanent full-time and permanent
part-time employees who are on the rolls of State Bank of India
service as on the date of settlement and who were in the rolls of
42
State Bank of India on 31.10.1993 alone will be entitled for
payment of Special Compensatory Allowance. In other words,
those who had joined the bank service on or after 01.11.1993
will not be eligible to receive Special Compensatory Allowance
(Copy of the Memorandum of settlement dated 22.07.2003 and
23.07.2023 between the bank and both the federations). Even
prior to the merger of the associate bank put up a claim for
Special Compensatory Allowance which was declined by the
Bank being a request for a special package in addition to what
has been agreed to and paid in terms of the Industry Level
Agreement. It was observed that petitioners are members of
AISBOF, which is one of the signatories to joint note singed by
the Officers’ Association with IBA on 14.12 1999. Demand of the
4th petitioner had raised the issue of SCA in April 2000 itself.
The joint note has been signed by the officers
associations/federations only after being satisfied.
34. As regards Special Balancing Allowance (SBA), the
minutes of the meeting with the Federations held on 15.02.2011
in respect of distribution of 289.64 crores,
1) Clause 11 of the minutes specifically states that, employees and
officers joining the Bank on or after 01 11 2007 by appointment or
recruitment or by mergers will not be eligible for the above SBA It
further states that officers and employees of erstwhile State Bank of
Indore was a separate entity as on date of 9th Bipartite settlement and
hence will not be eligible for SBA and the minutes also discusses the
43
reason why the officers and employees of erstwhile State Bank of
Saurastra who were in permanent employment of the bank as on 31.
10.2007 was eligible to the above special balancing allowance w.e.f
13.08.2008 as the staff cost of the officials and employees of State
Bank of Saurastra was included in the work sheet of IBA as SBI
employees while arriving at the amount of Rs.289.64 crores.
i) Clause 5, states that SBI was granted vide approval given by
Government of India vide letter dated 18 11.2010 to distribute the
amount of Rs.289.64 crores representing the balancing cost of
pension in respect of SBI arising out of 9th Bipartite settlement
and joint note dated 27.04.2010 amongst its employees in the
form of allowance. The minutes states that, the government has
advised that this amount however should be frozen as on
01.11.2007 for the entire duration of the 9th bipartite settlement.
The minutes also encompass specific advise given by the Govt.
That it shall be a one time arrangement and that will not be
treated as a precedent for a future settlement. It is submitted
that for the very same reason that the benefits of SCA has also
been restricted by the cut off date during which the employee/
officer should be on the rolls of the establishment of State Bank of
India
35. As per Government of India directives vide letter No.
F-4/4/4/96-IR, dated 07.10.1996, Public Sector Banks cannot
extend any new benefits or existing benefits/facilities, make
improvements in officers/workmen which are beyond the
preview of industry level Bipartite settlement and officers’
service regulations without taking prior approval of the
Government. Therefore, in the merger scheme or acquisition of
SBT, SBH, SBM, SBP, SBBJ, no such term has been approved
by SBI. Hence, it is submitted that petitioners have no cause of
action to claım allowances and they cannot be permitted to
circumvent the law on the misconceived ground of equality.
Having signed the minutes of the meeting, they have
44
approached the Court which is a total violation of the terms and
conditions agreed to in the meeting. On the basis of the said
agreements, bank issued Circular dated 01.03.2011.
36. Out of the total strength of 70,190 employees in the
five Associate Banks at the time of merger, consisting of both
award staff and officers as on 01.04.2017, only 25355 are the
officers out of which more than 99 percent have opted for
pension in lieu of contributory provident fund and they have
authorized the bank to transfer the banks contribution to the
trustees of pension fund, for meeting the pension obligation as
per Pension Regulations of 1995. Therefore, in terms of the
application of doctrine of election, having already opted for
pension in lieu of contributory provident fund and having
acquiesced for the position, much before the merger, petitioners
are debarred and estopped from raising the present claim.
37. Further, at the cost of repetition, from the counter
affidavit, it is to be noted that Petitioner No. 1 was proceeded
with Disciplinary Inquiry by the transferee bank for gross
misconduct committed by him in the course of employment with
the Transferor Bank during which, it was proved that he
committed misconduct qua the charges and was imposed with
the punishment of removal from service and the Appeal having
45
been dismissed, he preferred Writ Petition No. 13041 of 2020.
This Court by order dated 03.05 2024 directed the bank to
consider imposition of any lesser punishment than that of
dismissal and removal; then SBI preferred Writ Appeal No. 819
of 2024 which was also dismissed by the Division Bench vide
judgment dated 09.09.2024. Considering the said order, the
Disciplinary Authority, having independently reviewed the
earlier decision of removal from service, imposed the
punishment of “Compulsory Retirement” by order dated
13.11.2024 which was communicated to Petitioner No.1, who,
in the meanwhile, filed Review Application in Writ Appeal
through another counsel questioning the very submissions
made on his behalf by his earlier counsel who submitted that
the Bank can also impose the punishment of Compulsory
Retirement stating that such an instruction was not given by
Petitioner to his earlier counsel, but the Bank has denied such a
contention as the very Petitioner was present in the course of
such submission by his earlier counsel in the Court Hall. The
Division Bench was reported as to the decision taken pursuant
to the orders of the learned Single Judge affirmed by the learned
Division Bench and having recorded the submission, the
Division Bench dismissed the Review Petition. Thus, the order of
Compulsory Retirement attained finality. It is not out of place to
46
mention that Compulsory Retirement, a major punishment, is
lesser than the punishment of dismissal and removal from
service in law as the same is not stigmatic, albeit the terminal
benefits and pension are the same. Since petitioner No.1 has
not exercised his option while joining the services of SBI, as
envisaged by the offer letter, he will be paid terminal benefits
from the effective date. As regards the status, in the light of the
disciplinary action taken as per Regulations of the Transferor
Bank, he has no locus to challenge the merger scheme or terms
and conditions approved by the Board of Directors of Transferor
Banks and the Central Board of the Transferee Bank and the
Central Government and Reserve Bank of India.
38. As regards the locus of Petitioner No 4 – a
registered Trade Union under Trade Union Act, 1926 which is
governed by the Bye-Laws framed under the Statute, as per
Bye-Law No. 28 as to the Legal Proceedings by which the
Federation being a Corporate Body may sue or be sued in the
name of its “General Secretary” of “All India State Bank Officers
Federation” or in the name of any other Person so authorized by
the Executive Committee of AISBOF in respect of its own rights
and interest and obligations. The writ affidavit on behalf of
Petitioner No. 4 in the cause title was stated to be represented
47
by its Vice-President Harshavardhan Madabhushi, AISBOF and
the subsequent affidavits filed by way of reply/Interlocutory
Applications by the other person in the capacity of Vice-
President, did not produce any resolution of Executive
Committee in proof of such of the All India State Bank Officers
Federation located at Chennai as then was having registered
Office at Chennai which is essentially to be represented by the
General Secretary of such Executive Committee Respondents
place reliance on the Division Bench judgment of Madhya
Pradesh High Court in Prabhat‘s case (supra) which declined
to entertain a Writ Petition filed by a person who was not
authorized to initiate the legal process on behalf of the
Association. The Madhya Pradesh High Court reiterating the
ratio in Prabhat‘s case (supra), in the case of Madhya Pradesh
Sikshak Sangh through its Joint Secretary against the State of
Madhya Pradesh was pleased to dismiss the Writ Petition and
further in United Private Hospitals Directors Association
through its Vice-President was pleased to dismiss at the
threshold such Writ Petitions since not been authorized by the
registered/unregistered incorporated or not bodies.
39. With regard to Petitioners 2 and 3, who are the
employees of erstwhile SBH, did not indicate at all as to what
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options they have exercised so as to exhibit their grievance. In
other words, it is lack of espousing a cause so as to adjudicate
the issues. It is stated from the records of Respondent Bank
that Petitioner No.2 retired on 30.05.2023 and opted the
terminal benefits of State Bank of India, as per option A, in
terms of which he would be entitled for Pension as of the SBI
Pension, Bank’s Contribution Provident Fund from the effective
date i.e. 01.04.2017 and Statutory Gratuity as payable under
Payment of Gratuity Act. Petitioner No. 3, on his
superannuation, was paid terminal benefits as chosen by him
and he is receiving pension as per his eligibility. Petitioners 2
and 3 in fact did not espouse any cause in their individual
capacities nor the grievance on the touchstone of Article 14 or
any right, and therefore the Writ Petition must fail on the above
objections.
40. In the light of the foregoing discussion, this Court is
not inclined to entertain the claim of petitioners. The Writ
Petition is devoid of merits and the same is liable to be
dismissed.
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41. The Writ Petition is accordingly, dismissed. No
costs.
42. Consequently, Miscellaneous Applications, if any
shall stand closed.
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NAGESH BHEEMAPAKA, J
20th June, 2025
ksld