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Decided On : Nov-16-1995
Reported in : 1996(1)ALT390
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Judgement :
M.N. Rao, J.
P.A.D.B.(L.T.)
D.C.C.B.(ST.)
Cadre
Payscale
Totalemoluments
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Cadre
Payscale
Totalemoluments
minimum
maximum
minimum
maximum
Manager
675-40-995-45-1400
2,096
3,547
560-31-622-37-770-41934-52-1142-61-1264
2,077
4,560
Secretary
460-25-610-30-730-35-940
1,539
2,906
Manager
454-25-504-31-628-37776-42-944-52-1048
1,689
3/42
3,799
410-20-490-35-640-28-780-30-870
1,452
2,710
Accountant
332-17-366-21-450-25-550-31-674-37-748-38-824
1,230
3,011
Accountant
340-18-412-20-492-25-617-28-757
1,262
2,394
Supervisor/ Typist
300-15-360-18-432-20-552-25-702
1,134
2,220
264-11 -286-13-312-18-384-22-472-26-576-33-708
983
2,603
Driver
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220-11-330-13-434
834
1,512
Driver
211-4-247-6-286-8-318-9-336-10-376
995
1,773
Peons/ Watchman
200-7-255-10
757
1,353
Peon/ Watchman
163-171-4-21 6-5-249-6-288
768
1,357
3. Even before the Rule 73 was framed, writ petitions were filed in this
court challenging the action of the Government in accepting the
recommendations of the One Man Commission headed by Sri V.
Sunderesan, IAS., a senior civil servant, which went into the question
and submitted its report. As all these cases are inter-linked, involving
common questions for adjudication, we are inclined to dispose of the
same by this common judgment.
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level, the unit was Primary Agricultural Co-operative Society (PACS); at
the District level, it was District Co-operative Central Bank (DCCB); and
at the apex level, it was designated as the Andhra Pradesh State Co-
operative Bank. The long term credit facilities were made available by
a two-tier structure: at the taluk level, the organisation was Primary
Agricultural Development Bank (PADB) and at the apex level, the
organisation was the Andhra Pradesh Co-operative Central Agricultural
Development Bank Ltd. The Legislature of the State of Andhra Pradesh
enacted Act No. 1 of 1987 introducing what was commonly called
'Single Window System' integrating the long term and short term co-
operative credit structures in order to revitalise co-operative
institutions, as stated in the statement of objects and reasons. To
achieve this objective, the statement of objects and reasons says, 'It is
necessary to reorganise the various co-operative institutions on the
new pattern to ensure financial viability and easy access by the
members to the co-operative institutions in the interest of better
administration of democratic function. In the process, certain classes
and levels of societies will be abolished and the functions, funds, assets
and liabilities will be transferred to the newly formed Single Window
Institutions....' Section 15-A of the principal Act was amended by
Section 2 of Act 1 of 1987 conferring power on the Registrar 'to
amalgamate or merge any society with any other such society or to
divide and restrict or transfer the area of operation of a society or to
liquidate a society for any of the purposes mentioned therein. Section
11 of Act 1 of 1987 relates to abolition of Primary Agricultural
Development Banks. Omitting the immaterial points, it reads:
(a) ... ... ....(b) ... ... ....(c) ... ... .... (d) the Registrar may transfer the
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officers and other employees who immediately before such abolition
were in the service of the said Bank (including those belonging to a
centralised service) to the service of the Financing Bank or to a Primary
Agricultural Cooperative Society in the manner prescribed,
Provided that-
(i) the terms and conditions applicable to such officers and other
employees, consequent on their absorption in the service of
Cooperative Central Bank or the Primary Agricultural Cooperative
Society shall not be less favourable than those applicable to such
employees immediately before such abolition as respects pay and
allowances, leave, gratuity, provident fund and age of superannuation;
and
(ii) the service rendered by any such officer or other employee under
the said bank upto its abolition shall be deemed to be service under
the Co-operative Central Bank or, as the case may be, the Primary
Agricultural Co-operative Society and he shall be entitled to count that
service for purpose of increment, leave or provident fund and gratuity.'
(3) To keep in view the equation of various posts of erstwhile cadre and
make suitable recommendations.
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elaborate report after considering the qualifications of the two sets of
employees the method of appointment, the nature of duties performed
by them and the pay structure. The principles evolved under Section
115 (5) of the States Reorganisation Act for equation of posts and
integration of services among the employees of the States affected by
the States Reorganisation constituted the basic guidelines for the One
Man Commission. Although the Government accepted in the beginning
in toto the recommendations of the One Man Commission, later on,
agreed for deviation in one particular respect viz., to equate the post of
Manager, P.A.D.B. with that of the Manager D.C.C.B., instead of with
the higher post of Assistant General Manager, D.C.C.B. and this was
done because of the agreement reached between the rival associations
To set right any imbalance that would creep in because of this
deviation, the State Government, at the request of the two service
unions, had agreed for creation of 107 posts of Assistant General
Managers in the District Co-operative Central Banks, equivalent to the
number of Managers of the erstwhile P.A.D.Bs., as on 31-3-1987 and to
fill up these posts on the basis of common seniority of the Managers of
the D.C.C.Bs., and the Manager and Secretaries of the erstwhile
P.A.D.Bs., and accordingly, this was inserted in Rule 73.
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1.
Manager
2.
3.
Engg. Supervisors
4.
Accountant
Accountant
5.
6.
Driver
Driver
7.
8.
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Peon/ Watchman
Peon, Watchman.
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op. Central Bank.
(a) The Managing Committee of the Dist. Co-op. Central Banks may fill
up operational vacancies upto cadre IV as existing as on the 1st April,
1987 in the erstwhile Primary Agrl. Dev. Banks and in the Dist. Co-op.
Central Banks by notionally promoting employees from the respective
streams duly following the service regulations and general norms for
promotions. The said operational vacancies shall be reckoned in terms
of the posts in the Dist. Co-op. Central Banks and erstwhile Primary
Agrl. Dev. Banks which were once filled by the institutions but became
vacant later. The operational vacancies under short term and long term
streams, that arose between 1st April 1987 to 31st October 1991 shall
be filled up from the respective streams following the principle
governing promotions. The posts required to be filled by direct
recruitment shall not be considered while determining the operational
vacancies for notional promotions.
(c) The promotions will have only notional effect for reckoning the
seniority in the integrated cadre and monetary benefit will be extended
to the employees with effect from 1-1-1993.
IV FUTURE PROMOTIONS:
The future vacancies of Managers in the Dist. Co-op Central banks shall
be filled in by promotion from the common pool of Asst. Managers,
Executive Officers or Accountants of erstwhile Primary Agrl. Dev. Banks
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and Accountants of the Dist. Co-op. Central Banks duly following the
service regulations and general norms governing the promotions. The
posts required to be filled in by direct recruitment shall not be
considered for promotion. V. OPTION:
(b) The General Manager of the Dist. Co-op. Central Bank shall call for
options of all the erstwhile primary Agrl. Dev. Banks personnel, by
issue of individual notices, as well as by affixture on the notice board of
the Dist. Co-op. Central Bank Head Office and its branches in the
district. The erstwhile Primary Agrl. Dev. Bank personnel shall send
their options to the General Manager within one month from the date
of notice calling for such options.
(c) If the erstwhile Primary Agrl. Dev. Bank personnel opt for Dist. Co-
op Central Bank pay and allowances, they shall be so governed with
effect from the 1st January, 1993. If they opt for pay and allowances,
gratuity and provident fund of erstwhile primary Agrl. Dev. Banks, they
shall be so giverned till they get next promotion in the next cadre in
the Dist. Co-op Central bank in the integrated set up. On such
promotion they shall be governed by the District Co-op. Central Bank
pay and allowances.
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(d) If any one does not give any option either to the Dist. Co-op. Central
Bank pay and allowances or erstwhile P.A.D. Bank pay and allowances
within the time prescribed, they shall be governed by the erstwhile
Primary Agrl. Dev. bank pay and allowances till such time they get
promotion as per norms and on such promotion they shall be governed
by the Dist. Co-op. Central Bank pay and allowances.
(e) The General Manager of the Dist. Co-op Central bank shall finalise
the options of all the employees of erstwhile Primary Agrl. Dev. Banks
within a period of two months from the date of receipt of such options
from the employee.
(a) The Inter se seniority of the erstwhile Primary Agrl. Dev. Bank
employees of the Dist. Co-op. Central Bank employees in the equated
cadres in each district shall be fixed by the General Managers, Dist. Co-
op. Central Bank on the basis of dates of their appointment in the
cadres in which they are working on regular basis including notional
promotions. If the dates of such appointments happens to be the same,
the seniority shall be fixed on the basis of the age, the elder being
placed above the younger. However, in this process, inter se seniority
of the Primary Agrl. Dev. Bank personnel and the inter se seniority of
the District Co-op. Central Bank personnel shall not be disturbed.
(b) The General Manager, shall initiate action for fixation of inter se
seniority, within six months of issue of order by Registrar of
Cooperative Societies transferring the Co-operative Central Banks and
give opportunity to all concerned to file objections, if any, within one
month of publication of the inter se seniority and, after considering
objections, issue the final list within four months.
10. For the petitioners, it was urged that the One Man Commission had
committed a serious error at the threshold stage itself in adopting the
principles evolved under the State Reorganisation Act with regard to
equation of posts and integration of services of the employees of
different States affected by the States Reorganisation. The Commission
went beyond its terms of reference in the matter of equation of posts
and integration of services between the two classes. The principles
evolved under the States Reorganisation Act have no relevance at all
in resolving the conflicting interests of the employees of D.C.C.Bs., and
the erstwhile P.A.D.Bs. Section 11 (2) (d) of the Act protects only
certain conditions of service of the employees of the erstwhile
P.A.D.Bs., viz., pay and allowances, leave, gratuity, provident fund and
age of superannuation. Although the second proviso to Clause (d)
speaks of service as one of the protected conditions, the service
rendered by the employees in P.A.D.Bs., was intended to be counted
only for the purpose of retirement benefits but not intended to be
reckoned for the purposes of promotion and seniority. Rule 73, which
provided these benefits to the former P.A.D.B. employees, has
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travelled beyond the legislative prescription incorporated in Section 11
(2) (d) and, therefore, it is ultra vires the section. The service
conditions of the petitioners were adversely affected by reason of the
principles incorporated in Rule 73 for equation of posts and integration
of services; the promotional prospects of the existing D.C.C.B
employees have been marred to a very great extent thereby infringing
their fundamental right under Article 16 of the Constitution of India.
The posts of Manager, Accountant and Supervisor in the D.C.C.Bs. are
fair higher than the posts of Manager, and Secretary, Accountant and
Supervisor of the erstwhile P.A.D.Bs., in the case of the former, the
duties performed, responsibilities shouldered and functions discharged
are of a higher nature when compared with those of the latter. The
superiority of the former is also reflected in the qualifications
prescribed and the emoluments drawn vis-a-vis the latter. Rule 73 has
treated both the categories irrationally; unequals cannot be treated as
equals and, therefore, Rule 73 is liable to be struck down as violative of
Articles 14 and 16 of the Constitution. Section 11 (2) (d) of the Act,
which is claimed as the source of power for Rule 73, is at variance with
the legislative prescription contained in Section 116-A of the Act
conferring power on the Registrar of Co-operative Societies to
constitute common cadres for posts in certain co-operative societies
mentioned therein including co-operative banks. Section 15-A is a
separate code by itself conferring power on the Registrar of Co-
operative Societies to amalgamate or merge one society with another
society or liquidate a society for reasons specified therein and in that
process only he can change the service conditions of employees
affected by such amalgamation or liquidation. Under Section 11 (2) (d),
the Registrar has power to transfer officers and other employees of the
P.A.D.Bs., who were in service before 1-4-1987, the date of abolition,
'to the service of the financing bank or to a Primary Agricultural
Cooperative Society in the manner prescribed'. Rule 73 is concerned
only with the equation of posts and integration of services between the
employees of the D.C.C.Bs., and the employees of the erstwhile
P.A.D.Bs. As the D.C.C.B. is not the financing Bank of the P.A.D.B., Rule
73, in its entirety must be struck down. Although proviso 1 to Clause
(d) of Sub-section (2) of Section 11 refers to the absorption of the
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erstwhile P.A.D.B. employees with those of D.C.C.B. employees and
proviso 2 deals with reckoning of the earlier service in the P.A.D.Bs. for
certain purposes, these two provisos cannot control the provisions in
the main Clause (d), and therefore, in the interpretation of Clause (d),
the provisos must be totally excluded.
12. The learned counsel for the other opposite parties urged that the
employees of the D.C.C.Bs. in the equated posts are in no way superior
to the officers in the erstwhile P.A.D.Bs.
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'It seems to us clear that it is not only convenient but manifestly
necessary to provide for the service conditions of the Bank's staff in
order to give effect to the provisions of the Act.... It is, in our view, not
open to any question either on the basis of reason or authority that the
power to provide for service conditions of the staff is at least incidental
to the obligation to carry out the purposes for which the Bank was
constituted.' We, therefore, unhesitatingly, reject this contention.
14. The first contention so vigorously advanced for the petitioners that
the One Man Commission went beyond its terms of reference is without
any actual basis. G.O.Ms.No. 384 dated 19-5-1988 by which the One
Man Commission was appointed lays down in specific terms in
paragraph 4 that the Commission will examine 'all the issues relating
to the integration of services of the employees of Co-operative Central
Banks and the erstwhile P.A.D.Bs.' The other contention concerning the
One Man Commission is that it committed a grievous error in adopting
the guidelines evolved in regard to equation of pests and integration of
services at the time of the States Reorganisation. In paragraph 4.04 of
the report, it was stated:
'... the Commission also examined the principles and the guidelines
which governed the equation of posts of the erstwhile Hyderabad
Government and the erstwhile Andhra Government at the time of the
formation of the enlarged Andhra Pradesh State. The principles which
were laid down in this behalf were mainly as follows:
It may be seen that the factors that have been taken into consideration
by this Commission in this regard are more or less in agreement with
the principles which governed the equation of posts of Andhra and
Telangana services though the dimensions of the two problems are not
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quite comparable.'
15. The legality of the reasons stated by the Commission for confining
its consideration only to these two issues is outside the purview of this
batch of cases. We, therefore, do not propose to go into that question.
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and responsibilities, position in the hierarchical system and pay and
allowances are undoubtedly crucial factors that must go into the
estimate when posts are equated and norms are evolved for the
purpose of consequential inter se seniority. In what respects these
considerations are beyond the permissible range of the Commission,
none of the learned counsel appearing for the petitioners could
substantiate. The problem was viewed by the Commission, in our
considered opinion, from the correct perspective. In a large number of
cases arising under the States Reorganisation Act concerning equation
of posts and integration of services of the employees affected by the
re-organisation of the States, the Supreme Court upheld the principles
as just and fair. Subba Rao v. Union of India - : [1973]1SCR945 ; State
of A.P. v. Rameshwar Prasad - : (1976)ILLJ295SC .
Manager
3. Engg. Supervisors
4. Accountant
Accountant'.
The reason for the change at the level of the Manager, as already
stated supra, is the agreement of the two service associations and the
creation of 107 posts in the cadre of Assistant General Managers in the
D.C.C.Bs., equivalent to the number of Managers in the P.A.D.Bs., as on
31-3-1987.
18. The Commission taking the view that the protection of service
given to P.A.D.B. employees under Section 11 of the Act should
'logically be extended to cover seniority also' and after rejecting the
plea of the D.C.C.B union that only to the extent of 2/3rds of the
service of the P.A.D.B. employees should be counted, concluded in
Chapter V that 'the inter se seniority of the P.A.D.B. employees should
be fixed in the equated cadres on the basis of the dates of their
appointment in the cadres in which they were working on a regular
basis including notional promotions, if any, on 1-4-1987'.
P.A.D.B.(LT.)
D.C.C.B. (S.T)
Cadre
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Pay scale
Total emoluments
Cadre
Pay scale
Total emoluments
minimum
maximum
minimum
maximum
Manager
675-40-995-15-1400
2,096
3,547
560-31-622-37-770-41 934-52-1142-61-1264
2,077
4,560
Secretary
460-25-610-30-730-35-940
1,539
2,906
Manager
23/42
454-25-504-31 -628-37 776-42-944-52-1048
1,689
3,799
410-20-490-35-640-28-780-30-870
1,452
2,710
Accountant
332-17-366-21-450-25-550-31-674-37-748-38-824
1,230
3,011
Accountant
340-18-412-20-492-25-617-28-757
1,262
2,394
Supervisor/ Typist
300-15-360-18-432-20-552-25-702
1,134
1,512.
264-11-286-13-312-18-384-22-172-26-576-33-708
983
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2,603
P.A.D.B.(L.T.)
D.C.C.B.(S.T)
Cadre
Methodof appointment
Qualifications
Natureof duties
Levelof responsibility
Cadre
Methodof appointment
Qualifications
Nature ofduties
Levelof responsibility
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8
10
Manager
(a) By promotion
Asst.Gen Manager
By promotion
Assistingand CM
No.3 inhierarchy
(b) By Transfer
Secretary
(a) By promotion
Manager
(a) By promotion
(b) By transfer
A Post Graduate
Asst. Manager/E.G.
(a) By Promotion
No. 3 inhierarchy
---
27/42
---
---
---
---
Accountant
(a) By promotion
Maintenanceof Accounts
No. 4 inhierarchy
Accountant
By promotion
---
---
Degree in Commerce
Supervisor
(a) By promotion
No. 5 in hierarchy
Supervisor
No. 5 in hier
(b) By direct
Original duties
20. Among the P.A.D.Bs., in the two categories of Chief Executives viz.,
Manager and Secretary, some of the larger P.A.D.Bs., were in the
charge of Managers while the remaining were managed by Secretaries
and this depended upon the norms prescribed by the Registrar of Co-
operative Societies: if the turnover of business was less than Rs. 50
lakhs, Secretary was appointed and if it was above Rs. 50 lakhs,
Manager was appointed. Comparing this with the set up in the
D.C.C.Bs., where there was only a single grade and they were posted in
all the branches irrespective of the volume of the business, although
the Chief Executive of the D.C.C.B. was the General Manager for
purposes of equation, the Commission considered Managers as Chief
Executives as they did not have the same independent status as the
Managers of the P.A.D.Bs. There were to grades selection grade and
special promotion grade - among the P.A.D.B. Managers besides the
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normal grade of Manager but the same was not the case with the
D.C.C.B.
21. The post of Secretary in the P.A.D.B is the feeder category to the
post of Manager. The P.A.D.B. Manager, being the Chief Executive in
charge of an autonomous co-operative institution, was directly
answerable to the apex institution. He was responsible for the sanction
of long term loans to the individual farmers. Processing of the loan
applications involve scrutiny of documents relating to immovable
properties, a much more complicated task that the procedure involved
in the sanction of short term or medium term loans by the D.C.C.Bs.,
where no security except a personal bond will be taken from the
loanee. The P.A.D.B., was also responsible for the maintenance of loan
ledgers of individual loanees and the follow-up action for recoveries.
The main responsibility was on P.A.D.B., for implementation of larger
schemes for area development, minor irrigation, I.R.D.P. schemes etc.
As against these duties and responsibilities of P.A.D.B. Managers, the
Manager of the D.C.C.B was only the head of the office which
constituted a tier between the primary cooperatives and the Co-
operative Central Banks. He had no independent role in the sanction of
loans; this was performed by only certain categories of Managers in
charge of higher grades in the rank of General Manager, and Deputy
General Manager which are State wide cadres.
22. The post of Accountant in the P.A.D.B., was equated with the post
of Accountant in the Co-operative Central Bank. It was observed by the
Commission that the post of Accountant in the P.A.D.B. was the feeder
category to the post of Manager whereas there are two levels between
the Accountant and Manager in the D.C.C.B. and both of them were
made eligible for promotion to the post of Manager in the integrated
setup. The posts of Assistant Manager/Executive Officer and
Engineering Supervisor in the erstwhile P.A.D.Bs., were allowed to
remain as distinct categories which will fade out in course of time. On
this aspect, there was no controversy.
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D.C.C.B.
24. The criticism that emanated from the counsel for the petitioners
against the Commission's report is that the Commission had ignored
one important aspect that the D.C.C.Bs. were really doing banking
business whereas the P.A.D.Bs., were only distributing long term loans.
The area of operation of the P.A.D.B. was much smaller compared to
the D.C.C.B. We are not inclined to accept this contention. Whatever
banking business a D.C.C.B. does was only incidental to the main
function of distributing short term loans whereas the P.A.D.Bs. were
entrusted with the responsibility of distributing long term loans. The
reasons given by the Commission, as noticed above, are sound and
rational. Distribution of short term loans, which is the main function of
the D.C.C.B. is much easier than arranging long term credit which
involves scrutiny of documents follow-up action and other higher
responsibilities. As regards the area of operation, although there were
22 District Co-operative Central Banks in the State as on 1-4-1987,
they also had 440 branches in the State whereas the number of
P.A.D.Bs. was 218. The jurisdiction of P.A.D.B. which was approximately
confined to the erstwhile revenue taluk, was far wider compared to a
branch of the D.C.C.B. the jurisdiction of which extends over a revenue
mandal. We are not persuaded by the argument of the counsel for the
petitioners that while considering D.C.C.Bs., we must take the District
as a unit and since the branches are part of the District Head Office,
they cannot be treated as independent units while considering the
nature and responsibilities as well as territorial jurisdiction. As a
general proposition of law, although it may be said that a body
corporate and its branches are not distinct and separate units from
each other, in the case of a Bank, operating through its branches, the
latter are regarded for several purposes as separate and distinct
entities from the Head Office, A.C. International Ltd., v. Custodian,
Banco National Ultra Marino - : [1982]1SCR16 .
'.... the Secretary of the erstwhile PADB who is now equated on par
with the Manager of the DCCB was the Chief Executive of the said bank
answerable directly to the Apex Bank and the CC & RCS, whereas the
Manager of the DCCB is in charge of a Branch, which is a part of
Revenue Mandal and is answerable only to the General Manager of the
DCB but not entering into any correspondence as was in the case of
Secretary/ Manager of the erstwhile PADB. Similarly the Accountant of
the erstwhile PADB will prepare the accounts of the entire unit while
the Accountant in a DCCB is only for limited transactions of specified
subjects. The Supervisor of the erstwhile PADB processes the loan
application, arrange for disbursement of loans, its utilisation and
recovery thereon, and the services of the supervisors in the DCCB are
no superior than the services rendered by the supervisors of the
erstwhile PADBS. As seen from the facts mentioned above, no
supremacy of any cadre either of the erstwhile PADB or CCB can be
claimed. However, due care was taken to safeguard the interests of the
employees of both the wings at large.'
27. The contention that the principle of 'functional equivalence and co-
equal responsibility', the guiding factors laid down in N.P. Verma v.
Union of India, : (1989)IILLJ540SC , was violated does not merit
acceptance. In the above case, the Supreme Court was concerned with
the rights of the employees of the erstwhile Caltex Oil Refining (India)
Ltd., ESSO Standard Refining Company of India Ltd., and Lube India
Ltd., consequent upon their amalgamation with the Hindusthan
32/42
Petroleum Corporation Ltd. The Supreme Court while laying down the
principle of law that 'while it is not within the domain of the court to
make equation of posts for the purpose of integration, it is surely the
concern of the court to see that before the integration is made and
consequent fitment of officers in different grades /scales of pay is
effected, there must be an equation of different posts in accordance
with the principles stated above', found as a fact that in accordance
with the aforesaid principle, equation of posts was not effected and,
therefore, held:
28. Whatever injustice the D.C.C.B. employees felt was done to them
because of the equation of the post of the Secretary of the PADB with
that of the Manager of the DCCB was set right by the Government by
creating 107 posts of Assistant General Managers in addition to the
sanctioned strength for the purpose of accommodating the senior most
personnel in the cadre of Managers of the integrated DCCB. The
acceptance of the recommendation of the One Man Commission in all
respects except the equation with regard to the post of Manager and
the reasons for the deviation and the contemporaneous action taken to
safeguard the interests of the DCCB Employees by creating 107 posts
of Assistant General Managers cannot be said to be unjust or illegal. A
comparison of the pay structure, the nature of the duties performed
and the responsibilities shouldered, the functions discharged, the
structure of the hierarchical set-up and the territorial jurisdiction over
which the incumbents were required to operate fully justifies the
equation of posts and integration of services as contained in Rule 73.
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Court service, it was held by the Supreme Court:
30. Ever since the single window system was adopted by the State
Government, efforts were being made to satisfy all the just demands of
the employees in the realisation that discontentment among the
employees would adversely affect the functioning of the institutions.
After the agreement, reached by the two service unions, Rule 73 as it
stands now was issued. Overwhelming number of the employees of the
DCCBs seem to have been satisfied, but a few individuals, thinking that
their chances of promotion would be adversely affected if Rule 73 was
implemented in its present form, have been carrying on this fight. We
do not find any basis for the apprehensions entertained by them. As
the arguments were confined to the general legal questions and the
staffing pattern of the two institutions - PADBs and DCCBs - we have
not examined the case of any particular individual. There is no need to
do so in view of Rule 73(IX) which provides for a right of appeal to the
Managing Committee of the District Co-operative Central Bank against
any order passed by the General Manager of the Bank. It must also be
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mentioned in this context that the right of promotion should not be
equated with a mere chance of promotion. The right to be considered
for promotion is a condition of service but not mere chance of getting
promotion, See: Reserve Bank of India v. C.N. Sahasranama - :
(1986)IILLJ316SC . The Supreme Court in Reserve Bank of India's
case,6 also cited with approval an earlier precedent in Kamal Kanti v.
Union of India, : (1980)IILLJ182SC , wherein it was held that in matters
like formulation of seniority lists, justice should be ensured to as many
as possible and injustice to as few and 'it was not safe to test the
constitutionality of a service rule on the touch-stone of fortunes of
individuals'.
31. Restating the well accepted proposition that in service matters, the
rules made cannot satisfy each and every employee, the Supreme
Court observed in V.T. Khanzode (1 supra).
32. Both on principal and precedent, the claim of the petitioners that
the equation of posts and integration of services was done unjustly is
unsustainable. Rule 73 does not suffer from the vice of
unconstitutionality either on the basis of Article 14 and 16 of the
Constitution.
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33. The next question for consideration is: whether Rule 73 is ultra
vires Section 11(2) of the Act?
34. Sub-section (1) of Section 11 says that with effect from the
appointed date, the Primary Agricultural Development Banks shall
stand abolished. The consequences of such abolition are contained in
Sub-section (2). Clause (a) of Sub-section (2) says that on abolition of
the P.A.D.B. all rights and assets vesting in the bank and all liabilities
against it shall devolve on the Co-operative Central Bank of the District
concerned. Clause (b) refers to transfer to the D.C.C.B. of all contracts
made by the P.A.D.B. prior to its abolition and subsisting on the
relevant date. Clause (c) says that the members of the erstwhile
P.A.D.B. shall be deemed to be the nominal members of the D.C.C.B.
without the right to vote till their loans are discharged. Clause (d), with
which we are concerned, empowers the Registrar to transfer officers
and other employees immediately before such abolition in the service
of the P.A.D.B. 'to the service of the financing bank or to a Primary
Agricultural Co-operative Society in the manner prescribed.'
Consequent on such absorption, the first proviso the Clause (d) says
that the terms and conditions of the absorbed employees shall not be
less favourable than those applicable to them immediately before such
abolition as respects pay and allowances, leave, gratuity, provident
fund and age of superannuation. The second proviso says that the
service rendered by any officer or employee of the P.A.D.B., upto the
date of abolition 'shall be deemed to be service under the Co-operative
Central Bank or as the case may be the P.A.C.S., and he shall be
entitled to count that service for the purpose of increment, leave or
provident fund and gratuity'.
35. The argument vigorously pressed into service by the counsel for
the petitioners was that only in respect of matters specifically referred
to in the first proviso viz., pay and allowances, leave gratuity, provident
fund and age of superannuation, protection was afforded to the
employees of the erstwhile P.A.D.Bs and the counting of the service
rendered by the in the P.A.D.Bs., shall be restricted, under the second
proviso, only for the purpose of increment, leave, provident fund and
gratuity. Equation of posts, integration of services arid inter se
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seniority are not the factors falling within the purview of Section 11(2)
(d) and inasmuch as Rule 73 specifically incorporates these aspects, it
is ultra vires the section.
37. Clause IV of Rule 73, which deals with future promotions, says that
the future vacancies in the post of Managers in the D.C.C.Bs. should be
filled by promotion from the common pool of Assistant Managers,
Executive Officers or Accounts of the erstwhile P.A.D.Bs., and
Accountants of the D.C.C.Bs., Clause (VI) incorporates the principle
governing inter se seniority which is to the effect that in the equated
cadres, Inter-se seniority of the erstwhile P.A.D.B. employees should be
determined on the basis of the dates of their appointment in the cadres
in which they were working on regular basis including notional
promotions.
38. The grievance of the petitioners in W.P. No. 14512 of 1994 and
14287 of 1994, who are Supervisors and Accountants, is that before
they moved into the equated cadres, in the cadres immediately below
the equated ones, they had put in longer years of service and,
therefore, their entire service, both in the equated cadre as well as the
cadre immediately below that, should be reckoned for the purpose of
seniority to the next higher post. On the face of it, this is an untenable
plea. When two posts are equated, the basis for future promotion must
be the service rendered in the equated cadre but not in the cadres
below the equated one. In respect of each separate cadre, reckoning of
seniority could only be in that cadre: For example, if an employee had
rendered 24 years of service in three cadres and was promoted to the
next fourth cadre in the 25th year of his service, it would not be open
to him to claim that because he could not earn promotion earlier due to
the stringent statutory hurdles, in the promoted cadre, his entire
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seniority of 25 years should be counted. Such a claim to say the least,
is highly' fanciful.
40. Yet another argument, a seemingly formidable one, urged for the
petitioners is that the power of the Registrar of Co-operative Societies
under Clause (d) was restricted to transferring the officers and
employees of the erstwhile P.A.D.B. 'to the service of the financing
bank or to a P.A.C.S. in the manner prescribed' and as the D.C.C.B. is
not the financing bank of the P.A.D.B., about which there is no dispute,
the entire scheme of absorption must be set aside. We felt almost
inclined at the first blush to agree with this contention, but on deeper
considerations, we are unable to do so.
41. It is true that D.C.C.Bs., are not the financing banks of P.A.D.Bs. The
Andhra Pradesh Central Co-operative Agricultural Development Bank, a
statutory body, is the financing bank of P.A.D.Bs., and this is
uncontroversial. P.A.C.S., have no financial capacity; they are small
societies functioning at the village level and there are no equavalent
posts against which the erstwhile P.A.D.B., employees could be
absorbed. In the main part of Clause (d) of Section 11(2), instead of
using the words 'to the service of the District Co-operative Central
Bank', inadvertently, in our view, the words 'financing bank' were used.
As Clauses (a) (b) and (c) specifically refer to the Co-operative Central
Bank as the body to succeed the statutorily abolished P.A.D.Bs., in all
respects - rights and assets, contracts, membership - and as respects
service conditions, provisos (1) and (2) of Clause (d) also mention only
the Co-operative Central Bank but not the financing bank, it is a clear
case of draftsman's fallibility. If the transfer of the officers and
employees of the erstwhile P.A.D.B. is to be construed as transfer to
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the 'financing bank' but not the 'DCCB', it would lead to absurd
consequences. It was not the intention of the legislature to effect such
transfer. Neither the context nor the other provisions of Section 11
envisage such an incongruity. In a situation where the ordinary
meaning of grammatical construction of a statute leads to absurdity, at
variance with the manifest purpose of the enactment, it should be
construed in a manner consistent with the intention of the legislature
or the enactment. The well established rule as slated in Maxwell's
Interpretation of Statutes and followed by our Supreme Court in Tirath
Singh v. Bachittar Singh, : [1955]2SCR457 , while interpreting Section
99 of the Representation of the People Act reads:
We, therefore, hold that the words 'financing bank' occurring in Clause
(d) must be read as 'Co-operative Central Bank'.
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purpose contained in Section 15-A(1)(e) for which amalgamation,
division or restriction of the area of operation could be done by the
Registrar was 'for any other reason in the public interest'. It is true that
when a particular society is amalgamated with another society or its
area of operation is restricted or it is liquidated, the Registrar will have
to devise a method to safeguard the interests of the employees of the
affected society. This power is basically different from what is
contemplated by Section 11(2) which is a direct consequence of
abolition of an entire class of societies viz., P.A.D.Bs., Section 11
specifically deals with abolition of P.A.D.Bs. and the consequences of
such abolition. It also takes care to protect the service conditions of the
employees of the abolished banks. It is, therefore, plain that Section
15-A has no application.
44. For these reasons, all the writ petitions fail and accordingly they
are dismissed. However, we make it clear mat the right of any
aggrieved employee to prefer an appeal to the Managing Committee of
the District Co-operative Central Bank against an order passed by the
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General Manager under Rule 73(IX) remains unaffected
notwithstanding the dismissal of these writ petitions. No costs.
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