T.V.KRISHNAN & ORS vs M/S ALL BANK FINANCE LTD. & ORS.
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 4th April, 2025
+ W.P.(C) 12450/2006
T.V. KRISHNAN & ORS …..Petitioners
Through: Mr. R.P. Sharma, Advocate with Petitioner No. 2 in person.
versus
M/S ALL BANK FINANCE LTD. & ORS. …..Respondents
Through: Mr. Rajesh Kr. Gautam, Mr. A. Gautam, Mr. K.N. Sahay, Mr. Deepanjal Choudhary, Ms. Likhvi, Advocates for R-1 and R-2.
Ms. Saroj Bidawat, Senior Panel Counsel for UOI/R-3.
CORAM:
HON’BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J.
1. This writ petition is preferred under Article 226 of Constitution of India whereby Petitioners seek revisions in their salaries and allowances at par with officers of erstwhile Allahabad Bank which merged with Indian Bank, along with arrears and interest @ 9% p.a. compounded monthly from the date payments became due till date of actual payments. Petitioner No.2 additionally seeks due increments and promotions w.e.f. 01.04.2014, which were denied only due to pendency of this writ petition, with consequential benefits.
2. Case of the Petitioners as averred in the writ petition and to the extent relevant is that Petitioner No.1 joined All Bank Finance Ltd. (All Bank) on 17.03.1992 as Assistant Vice President and his Basic Pay was fixed at Rs.4020/- per month. Pay scale of similarly placed officers in Allahabad Bank was Rs.4020-120-4260-130-4910 plus one stagnation increment of Rs.140/- and the aggregate salary was Rs.7800/- per month. Petitioner No.1s pay scale was revised to Rs.8050-230-9200-250-9700 with stagnation increment of Rs.250/2-10200, in accordance with sixth Bi-partite Settlement of 14.02.1995, retrospectively from November, 1992 and arrears from 01.07.1993 were paid to him in January, 1996 and thus Petitioner No.1s salary was revised to Rs.13,026/- p.m. Grievance of Petitioner No.1 is that two subsequent revisions in the salaries, which were given to officers in Allahabad Bank with effect from 01.04.1998 and 01.11.2002 respectively, vide Circulars dated 14.02.2000 and 04.07.2005, were not given to Petitioner No.1 by All Bank despite the fact that several officers from Allahabad Bank were working on deputation in All Bank with revised pay-scales. Total impact of both these revisions would have increased the monthly salary to Rs.8,400/- per month and resultantly the arrears payable upto March, 2006 would be to the tune of Rs.3.95 lacs.
3. Petitioner No.2 joined All Bank on 11.06.1993 in Scale-I with Basic Pay of Rs.2100/- p.m. at par with similarly placed officers in Allahabad Bank where the pay scale was Rs.2100-120-4020 with aggregate salary of Rs.4427.43 p.m. Petitioner No.2s pay scale was revised to Rs.4250-230/3-4940-350/1-5290-230/12-8050 with automatic movement to Rs.230/3-8740-stag 230/2-9200 as per the sixth Bi-partite Settlement dated 14.02.1995 w.e.f. June, 1993, notionally and arrears w.e.f. 0l.07.1993 were given in January, 1996. Petitioner No.2s aggregate salary was thus revised to Rs.5118/- p.m. but the grievance as averred is that in the parent Allahabad Bank there were two pay revisions with effect from 01.04.1998 and 01.11.2002, respectively, but the same were not implemented in All Bank, despite the fact that officers working on corresponding posts in Allahabad Bank on deputation with All Bank were drawing the revised emoluments. Revisions would have resulted in increase of the salary by Rs. 3100/- p.m. and the arrears payable upto March, 2006 would have been Rs. 1.74 Lacs.
4. It is further averred that Petitioner No.2 reached stagnation in Basic Pay in pay scale of 1995 after reaching the maximum of Rs. 9,200/-. At the time of amalgamation of All Bank with Allahabad Bank on 14.03.2018, salary of Petitioner No. 2 was Rs.49,188/- p.m. after 27 years and 10 months of service. Therefore, at the time of continuing the services of Petitioner No. 2 with Allahabad Bank, gross salary of Petitioner No. 2 was accordingly fitted in the then prevailing pay scale applicable to JMG Scale I in 2018, as per revision w.e.f. November, 2012, which was just 7 increments away from the base of the pay scale. This clearly shows that even in the same grade in which Petitioner No. 2 was appointed in 1993, Petitioner No. 2 was treated as an officer with seven years of service. Aggrieved by this, Petitioner No. 2 made a representation dated 05.05.2018 to General Manager (HR), Allahabad Bank, bringing forth her grievances.
5. Petitioner No. 2 also avers that on 10.05.2010, she was designated as Manager-Accounts & Legal but in the meeting held on 23.04.2014, Management of All Bank failed to consider grant of increment/promotion to Petitioner No. 2 and she was deprived of timely promotions only due to pending litigation albeit increased responsibilities were bestowed on her from time to time.
6. Petitioner No. 3 is stated to have joined All Bank on 16.03.1992 as Project Executive in the pay scale of Rs.2100-120-4020 and echoes the grievances of the other Petitioners that despite two salary revisions in the parent Allahabad Bank in the years 2000 and 2005, the same were not implemented by All Bank and hence seeks revision of his salary and consequent arrears to the tune of Rs.1.80 lakhs.
7. Learned counsel for the Petitioners and Petitioner No. 2 in person canvassed arguments and urged that All Bank was a Union Government Company of which 100% shares were of Allahabad Bank, a Nationalised/ PSU Bank, formed by an Act of Parliament and All Bank being a PSU company was subject to yearly audit/scrutiny of Office of the Comptroller and Auditor General of India (CAG). All Bank was registered as a Union Government Company with the Registrar of Companies, Ministry of Corporate of Affairs, Government of India. At the time when writ petition was filed, Reserve Bank of India (RBI) and Central Government had accorded permission for amalgamation of All Bank with Allahabad Bank, which is evident from letter dated 05.09.2003 issued by Ministry of Finance, Government of India and admittedly during the pendency of the writ petition, the two Banks amalgamated on 14.03.2018 and subsequently, Allahabad Bank merged with Indian Bank on 01.04.2020, which was impleaded as a party, with the permission of this Court.
8. It was contended that when Petitioners were appointed in All Bank, in the absence of separate service/wage rules, service conditions of employees of All Bank including payment of salaries etc. were regulated by service rules of Allahabad Bank. Pay scales of employees of All Bank were historically at par with pay scales of employees of Allahabad Bank working on corresponding posts under the 1995 pay revision i.e. prior to two salary revisions in 2000 and 2005. The duties discharged by Petitioners on their respective posts were similar to those on corresponding posts with Allahabad Bank and it is for this reason that pay scales of Petitioners were revised in 1995 in consonance with salary revision in Allahabad Bank and arrears were paid in January, 1996. However, overlooking this fact, Petitioners were deprived of subsequent salary revisions in Allahabad Bank from 01.04.1998 and 01.11.2002, which is arbitrary and discriminatory and violates Article 14 of the Constitution of India.
9. It was urged that in the 30th and 31st Board Meetings of All Bank held on 06.09.1995 and 25.09.1995 respectively, the Agendas were to consider the revision of salaries of officers of All Bank. It was noted in the 30th meeting that two officers in Scale-III and six in Scale-I were drawing scales identical to those of officers in Allahabad Bank with other similar benefits and it was thus recommended that since pay scales in Allahabad Bank were under revision in view of salary settlement and Allahabad Banks employees deputed in All Bank had received ad hoc payments, officers of All Bank be also given revision with arrears and similar benefits. In the 31st meeting, it was categorically observed that All Bank was guided by and was following Rules of parent Bank/Allahabad Bank regarding salary structure and benefits from the very beginning and that if revision of salary was taken into consideration, then additional expense of Rs.80,000/- p.m. (increase of 10% p.a.) would have to be incurred. It was also noted that all other subsidiaries were revising their salary structures and the same relief should be given to officers of All Bank, which was also a subsidiary of Allahabad Bank. Thus, by a Resolution in the 31st meeting, salary revision of officers of All Bank in line with those of Allahabad Bank was approved and it was decided that pending final settlement, interim relief as given to officers of Allahabad Bank be given to those of All Bank. Despite this decision, it was contended, that further pay revisions were not granted to the Petitioners when revisions took place in Allahabad Bank. It was also pointed out that in the letter dated 30.11.1995, Managing Director of All Bank had clearly acknowledged that the Bank was following the same salary structure as in the Allahabad Bank.
10. In a nutshell, grievance of the Petitioners is that vide Circulars dated 14.02.2000 and 04.07.2005, two pay revisions took place in Allahabad Bank as pay revisions takes place every five years in the banking industry, however, officers in All Bank were overlooked and the result was that not only those officers of Allahabad Bank who were working on same posts on deputation and performing same duties and shouldering same responsibilities as the Petitioners but even those working on lower posts, were getting higher pay scales, allowances and benefits.
11. It was highlighted that All Bank was a subsidiary of Allahabad Bank and 100% shares were held by Allahabad Bank, yet there was a discrimination between the two sets of employees, who were similarly placed. Respondents have completely ignored that there were no separate rules for fixation of salary/wages in All Bank and in service jurisprudence, it cannot be accepted that employees are deprived of salary revisions after rendering service for decades. Petitioner No. 1 worked upto 2011 and Petitioner No. 2 upto 2021 while Petitioner No. 3 was terminated and, save and except, one revision in 1995, their pay was never revised.
12. On behalf of Petitioner No. 2, it was additionally urged that she was denied promotion and other benefits till her superannuation on 31.05.2021 only on the ground that this writ petition was pending. Petitioner No. 2 was appointed in 1993 in Scale-I and after putting in 28 years of service with increased responsibilities from time to time, she superannuated on the same scale with just one increment in 1995 and this fact is evident from Minutes of Meeting dated 23.04.2014, which are placed on record as also reply dated 25.08.2014 sent on behalf of All Bank to the legal notice dated 31.07.2014 sent by Petitioner No. 2.
13. Petitioners urge that having implemented the Bi-partite Settlement of 1995 and granted revision of salary to the Petitioners at par with officers of corresponding status in Allahabad Bank, Respondents cannot deprive them of subsequent pay revision from 01.04.1998 and 01.11.2002. Reliance was placed on the judgment of the Supreme Court in P. Savita and Others v. Union of India, Ministry of Defence (Department of Defence Production), New Delhi and Others, 1985 SCC Online SC 332, wherein the Supreme Court held that where all relevant considerations are the same, persons holding identical posts and discharging similar duties should not be treated differently.
14. Learned counsel for Respondents No.1 and 2/Indian Bank took a preliminary objection to the maintainability of this petition, as originally filed against All Bank. It was argued that albeit during the pendency of this petition All Bank has amalgamated with erstwhile Allahabad Bank w.e.f. 14.03.2018 and thereafter Allahabad Bank merged with Indian Bank w.e.f. 01.04.2020, however, when the writ petition was filed it was against All Bank, which was a Company incorporated by erstwhile Allahabad Bank under provisions of Companies Act, 1956 to carry out and undertake business of equipment leasing including import leasing etc. as also to undertake work related to financial services. The company was not performing any Governmental/public function. In this context, reliance was placed on the judgment of the Supreme Court in Ajay Hasia and Others v. Khalid Mujib Sehravardi and Others, (1981) 1 SCC 722, wherein the Supreme Court elucidated various tests for determining as to when a Corporation/Company can be held to be an instrumentality or agency of the Government and one of the parameters is public function. It was urged that the inquiry is not to be as to how the juristic person is born but why it is brought into existence and in the present case, All Bank was created for purpose of commercial business of Allahabad Bank, with no function of public importance. Reliance was also placed on the judgment of the Supreme Court in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Others, (2002) 5 SCC 111, wherein the Supreme Court propounded four indicia for identifying whether a corporation is an agency or an instrumentality of the State.
15. Elaborating the argument, it was submitted that the Supreme Court in Pradeep Kumar Biswas (supra) further observed that merely because a body falls within one of the principles laid down, that by itself may not be sufficient to hold that it is State and a cumulative assessment of all facts must be carried out. In the present case, merely because Allahabad Bank was creation of a Statute and formed the All Bank and had 100% share capital, that by itself is not enough to classify All Bank as a State under Article 12 overlooking that Petitioners were not employees of Allahabad Bank and were performing merely commercial functions, contrary to State functions.
16. Without prejudice to the preliminary objection, on merits, it was submitted that the writ petition is wholly misconceived. Petitioners have no vested or legal right to claim pay revisions at par with employees of Allahabad Bank when Petitioners had no concern with the said bank. Pay fixation and pay revisions of its employees was a purely internal matter of All Bank and Petitioners cannot insist that similar revisions be given as given to officers of Allahabad Bank. Petitioners are misconstruing and misreading Minutes of the 31st Board Meeting of All Bank, which in fact reflect that only 1995 pay revision was recommended and that too, as a one-time measure. Pay revisions in Allahabad Bank were based on industry level settlement and were Bi-partite Agreements, to which All Bank was not a party. Since Petitioners were not similarly placed as employees of Allahabad Bank, they cannot claim discrimination and/or violation of Article 14 of the Constitution of India.
17. Heard learned counsels for the parties and examined their submissions.
18. Since preliminary objection was raised to the maintainability of the petition, I may deal with the same at the outset. Having heard the counsels, this Court finds that there is no merit in the preliminary objection for multiple reasons. First and foremost, no doubt when this petition was filed in 2006 it was against All Bank but in the writ petition it was clearly averred that in the year 2003, permission for amalgamation of All Bank with Allahabad Bank was accorded by Ministry of Finance, Government of India and copy of letter dated 05.09.2003 was appended to the rejoinder. During the pendency of the petition, admittedly, All Bank amalgamated with erstwhile Allahabad Bank w.e.f. 14.03.2018 and thereafter Allahabad Bank merged with Indian Bank w.e.f. 01.04.2020. In light of this development, petition was amended with the permission of this Court and amended Memo of Parties was filed impleading Indian Bank and its officers as Respondents.
19. The question is whether maintainability of this petition is to be judged on the basis of the status of Respondent, when the writ petition was filed or when this petition is taken up for final hearing and the answer to this question need not detain this Court as the Supreme Court in R.S. Madireddy and Another v. Union of India and Others, 2024 SCC OnLine SC 965, while examining the change of status of Air India Limited and dealing with the contention of the employees that when the writ petitions were filed, Air India was a Government company albeit in a converse situation, held that the question of issuing a writ arises when the writ petition is being decided. Relevant paragraphs are as follows:-
38. The question of issuing a writ would only arise when the writ petition is being decided. Thus, the issue about exercise of extra ordinary writ jurisdiction under Article 226 of the Constitution of India would arise only on the date when the writ petitions were taken up for consideration and decision. The respondent No. 3(AIL)- employer was a government entity on the date of filing of the writ petitions, which came to be decided after a significant delay by which time, the company had been disinvested and taken over by a private player. Since, respondent No. 3 employer had been disinvested and had assumed the character of a private entity not performing any public function, the High Court could not have exercised the extra ordinary writ jurisdiction to issue a writ to such private entity. The learned Division Bench has taken care to protect the rights of the appellants to seek remedy and thus, it cannot be said that the appellants have been non-suited in the case. It is only that the appellants would have to approach another forum for seeking their remedy. Thus, the question No. 2 is decided against the appellants.
39. By no stretch of imagination, the delay in disposal of the writ petitions could have been a ground to continue with and maintain the writ petitions because the forum that is the High Court where the writ petitions were instituted could not have issued a writ to the private respondent which had changed hands in the intervening period. Hence, the question No. 3 is also decided against the appellants.
40. Resultantly, the view taken by the Division Bench of the Bombay High Court in denying equitable relief to the appellants herein and relegating them to approach the appropriate forum for ventilating their grievances is the only just and permissible view.
20. In light of the aforesaid judgment, what is required to be examined is whether this writ petition is maintainable against Indian Bank and there is no dispute that the said Bank is a Public Sector Bank and writ is maintainable. The second reason that weighs with this Court to decide the issue of maintainability in favour of the Petitioners is that even assuming for the sake of argument that the writ petition is not maintainable, Petitioners cannot be relegated today to any alternate remedy against All Bank as the said Bank no longer exists having amalgamated with Allahabad Bank, which has in turn merged with Indian Bank. Thirdly, Petitioner No. 2 continued on the rolls of Indian Bank after 2018 as she admittedly superannuated in 2021 and fourthly, the writ petition having been filed in 2006, it would be a travesty of justice at this stage to oust Petitioners No. 1 and 3 from the writ remedy, particularly, when they have no other remedy. Even otherwise, Petitioners have rightly contended that All Bank was a Union Government Company of which 100% shares were held by Allahabad Bank which was a Public Sector Bank and was registered as a Union Government Company with the Registrar of Companies, Ministry of Corporate Affairs, Government of India. Chairman of Allahabad Bank was ex-officio Chairman of All Bank appointed by Government of India and other Executives of Allahabad Bank were Managing Director, Additional Managing Directors and Members of the Board of Directors, the apex body of All Bank and there was deep and pervasive control of Allahabad Bank over the functioning of All Bank. Therefore, all parameters as elucidated by the Supreme Court in Ajay Hasia (supra) and Pradeep Kumar Biswas (supra) are satisfied in the present case and writ petition is entertained.
21. On merits, this Court finds that Petitioners have made out a case in their favour. There is no dispute between the parties that All Bank did not have a separate wage/salary fixation rules/policy and historically i.e. in 1995, salaries of its employees including the Petitioners were fixed at par with employees of Allahabad Bank following the same pay structure. Petitioners have rightly placed reliance on Minutes of 30th Board Meeting of All Bank held on 06.09.1995 for considering revision of salaries of officers of All Bank, wherein it was observed that officers of All Bank be given similar benefits under the revised settlement at par with parent Bank i.e. Allahabad Bank in case the latter Bank approves the revision in pay scales for its officers. Relevant extract of the 30th Board Meeting of All Bank is as follows:-
22. In the 31st Board Meeting held on 25.09.1995 again to consider salary revision, it was clearly observed that officers of All Bank were drawing salaries and benefits at par with parent Bank and in the absence of any separate wage policy/rules for the subsidiary, similar benefits may be extended, more particularly, when other subsidiaries of Nationalised Banks have gone for increase in salaries. Significantly, it was also brought forth that All Bank was guided and was following the rules of parent Bank regarding salary structure and benefits from the beginning and the liability to meet the revision will not be much. These Minutes clearly shed light on two crucial aspects: (a) there was no separate wage rule/policy for officers of All Bank; and (b) being a subsidiary of Allahabad Bank, a fact recognised in several communications, the salary structure of employees of All Bank was always guided by the pay structure followed in Allahabad Bank. In fact, in the same Meeting, by a Resolution, salary revision of the officers of All Bank Finance Limited in line with the officers of Allahabad Bank was approved. Relevant extract of 31st Board meeting of All Bank is extracted hereunder for the ease of reference :-
23. Petitioners have also rightly flagged that in letter dated 30.11.1995 authored by Managing Director, All Bank and addressed to Executive Vice President, All Bank, it was stated that wage revision of bank officers was taking place and that All Bank was following the same salary structure as of officers of Allahabad Bank. Be it noted that the pay revisions in Allahabad Bank were in consonance with Bank practices and norms, where salary revisions take place every five years and accordingly, vide Circular dated 14.02.2000, salaries were revised for officers of Allahabad Bank w.e.f. 01.04.1998 followed by another pay revision vide Circular dated 04.07.2005 revising the salaries etc. w.e.f. 01.11.2002. In light of several factors taken holistically i.e. All Bank followed the same salary structure as of officers employed with Allahabad Bank; 1995 pay revision was given to Petitioners at par with officers of corresponding status in Allahabad Bank, implicit in which was recognition of the fact that Petitioners and other employees working on respective posts were discharging similar duties; there was no separate wage fixation/revision policy/rules in All Bank; admission of the fact by All Bank that officers in the said Bank in Scale III and Scale I were generally getting same benefits as the officers in Allahabad Bank and All Bank was guided by and followed the rules of parent Allahabad Bank in matters of pay structure and emoluments; and all subsidiaries of Allahabad Bank were revising salaries as per the structure of Allahabad Bank, there is no reason why Petitioners who were granted salaries at par with officers in Allahabad Bank under the 1995 structure should be deprived of subsequent pay revisions.
24. This Court is conscious of the fact that fixation or revision of salary is employers domain, but it is equally settled in service jurisprudence that there must be natural progression of employees in the form of pay revisions and timely promotions. Every organisation has a provision for revision of salaries and allowances, whether by way of Central Pay Commissions or Bi-partite Settlements etc. at regular intervals and it cannot be comprehended or accepted that employees would retire after serving for decades without pay revisions. Illustratively, Petitioner No. 2 brought forth that she was appointed in 1993 in Scale-I and after putting in 28 years of service with increased responsibilities from time to time, she was treated as an officer with seven years of service on the date of her retirement, with no pay revision after 1995 or promotion. Promotions were denied on the specious ground that the present writ petition was pending adjudication. All the Minutes of Meeting cumulatively point to a singular fact that Petitioners salaries were fixed in 1995 based on the salary structure adopted by the Allahabad Bank and being a subsidiary, Petitioners cannot be deprived of the pay revisions effected in Allahabad Bank for its employees w.e.f. 01.04.1998 and 01.11.2002.
25. Accordingly, for all the aforesaid reasons, this writ petition is allowed directing Indian Bank to re-fix the salaries of the Petitioners in consonance with pay revisions carried out by the erstwhile Allahabad Bank vide Circulars dated 14.02.2000 and 04.07.2005 and grant arrears with interest @ 6% per annum from the dates the amounts became due till actual payments. Petitioners are also held entitled for consideration of promotions and/or financial upgradations, if any, to which they became entitled during the pendency of the writ petition and which were denied on the frivolous ground that writ petition was pending adjudication. The entire exercise will be carried out within three months from today.
JYOTI SINGH, J
APRIL 04 , 2025/shivam
W.P.(C) 12450/2006 Page 19 of 19