M. Selvaraj Daniel vs Management of State Bank of India

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 707 of 1962

Decision Date: 22 April 1963

Coram: DAS GUPTA

The case titled M. Selvaraj Daniel versus Management of State Bank of India was decided on 22 April 1963 by a Bench of the Supreme Court of India. The petitioner, M. Selvaraj Daniel, sought relief against the respondent, the Management of State Bank of India, invoking provisions of the Industrial Disputes Act, 1947, specifically section 33(c)(2) concerning the date from which an increment under the Sastry Award should be given to a workman appointed after January 1950. The appellant had been appointed as a clerk in the State Bank of India on 14 December 1953. He filed an application under section 33(c)(2) of the Industrial Disputes Act before the Labour Court, requesting that he be awarded Rs 146 plus dearness allowance as the benefit due to him under the Sastry Award, which the Bank had not paid. The appellant contended that, because his appointment occurred in December, his annual increment under the Sastry Award should be dated each year to 14 December. By contrast, the Bank argued that the Sastry Award provided for his annual increment to be payable on 1 April each year. The respondent raised a preliminary objection, claiming that the issue of the appellant’s increment could not be adjudicated in an application under section 33(c)(2) of the Act. The Labour Court rejected this preliminary objection and, on the merits, accepted the Bank’s position. The appellant appealed this decision. The Supreme Court held that, under section 37(c)(2) of the Industrial Disputes Act, the Labour Court possessed jurisdiction to examine an award or settlement and to determine whether a workman was entitled to the claimed benefits. Consequently, the preliminary objection was correctly rejected by the Labour Court.

The Court further examined paragraph 292 of the Sastry Award, which dealt with the re‑grading of existing staff into revised pay scales. It observed that persons who joined the Bank after the new scales came into force were not covered by paragraph 292 because they were not “existing staff.” Such employees were to be placed directly into the revised scales at the time of their appointment. Accordingly, the appellant, who was appointed on 14 December 1953, was entitled to the benefit of the new pay scales from the very date of his appointment. Therefore, his increments under the revised scale would be payable each year on 14 December. The appeal, filed as Civil Appeal No. 707 of 1962, was taken on special leave from the order dated 11 December 1961 of the Central Government Labour Court, Delhi (L.C.A. No. 605 of 1961). Counsel for the appellant included M. K. Ramamurtthi, R. K. Garg, D. P. Singh and S. C. Aggarwala, while the respondent was represented by H. N. Sanyal, Solicitor‑General of India, together with H. L. Anand, Vidya Sagar and B. C. Das Gupta. The judgment, delivered on 22 April 1963, affirmed that the appellant’s right to an annual increment fell on his anniversary of appointment, i.e., 14 December each year, in accordance with the provisions of the Sastry Award and the applicable sections of the Industrial Disputes Act.

The judgment was delivered by Justice Das Gupta. The appellant had been appointed as a clerk in the State Bank of India on 14 December 1953, with a monthly salary of Rs 95 and a dearness allowance of Rs 50. The Sastry Award, which governed disputes between certain banking companies and their workmen and which had been given statutory force by the Industrial Disputes (Banking Companies) Decisions Act, 1955, was applicable to the appellant. The bank acted on the basis that the award required the appellant’s annual increment to be granted each year on 1 April. The appellant, however, contended that the award entitled him to receive his annual increment each December. On 14 December 1960, the appellant filed an application under section 33(c)(2) of the Industrial Disputes Act before the Labour Court in Delhi, seeking a calculation and direction for payment of the benefit he claimed the bank had denied. He annexed a schedule showing that, if the increment were to be granted on 14 December each year rather than on 1 April, he would be owed an additional sum of Rs 146 together with dearness allowance. In response, the bank raised a preliminary objection, arguing that the question of the appellant’s entitlement could not be raised or decided in an application under section 33(c)(2). On the merits, the bank asserted that it had complied with the terms of the Sastry Award by granting increments on 1 April each year. The Labour Court dismissed the bank’s preliminary objection but, on the merits, held that the appellant’s annual increment fell due after 1 April 1954 and subsequently on each 1 April, and therefore rejected the appellant’s application. By special leave, the appellant appealed this order. The appellant maintains that the Labour Court erred in holding that, under the award, increments for workmen appointed after 31 January 1950 but before the new scales were introduced fell due on 1 April each year beginning 1 April 1954. The respondent, in addition to supporting the Labour Court’s merits decision, argued that the Court had wrongly rejected the bank’s preliminary objection. The scope of section 33(c)(2) of the Industrial Disputes Act has been examined previously by this Court in Central Bank of India Ltd. v. P.S. Rajagopalan, where it was held that the Labour Court possessed jurisdiction to examine an award or settlement to determine whether a workman was entitled to the claimed benefits, and consequently the preliminary objection should be considered rightly rejected.

The Court observed that a workman is entitled to the benefits that he claims, and therefore the preliminary objection raised by the bank was correctly dismissed by the lower Court. Consequently, the Court had to examine the appellant’s allegation that the Labour Court was wrong in its substantive decision. In the appellant’s written statement, it was asserted that under the Sastry Award his salary should have been fixed according to clause 7 of paragraph 292, whereas the bank had applied the same basis used for employees who entered service before 31 January 1950. The appellant contended that if his salary had been fixed following clause 7 of paragraph 292, his annual increment would become payable on 14 December each year, rather than on 1 April each year as the bank had calculated.

The bank, on the other hand, argued that the adjusted salary would take effect under paragraph 292(1) and that, from 1 April 1954 onward, the increments were correctly given on 1 April of each year. The Labour Court had considered the appellant’s petition together with four other petitions and disposed of all of them by a single order. For reference, the other petitions involved two persons appointed on 24 February 1950, one appointed on 15 March 1951, and one appointed on 1 June 1953, while the appellant himself was appointed on 14 December 1953. In each of these cases, the Labour Court accepted the bank’s argument based on paragraph 292(12), which, after amendment by the Labour Appellate Tribunal, states that “the adjusted pay shall have effect from 1 April 1954.” The Court inferred that this rule should apply to every employee who was appointed after 31 January 1950 but before 1 April 1954.

It was necessary to note that paragraph 292 of the award dealt with the issue of integrating existing staff into the revised pay scales. Those revised scales were brought into force under paragraph 627 with effect from 1 April 1953, and the award itself was signed by the Tribunal members between 5 March and 20 March 1953. It follows that persons who joined the bank after the new scales became operative would not fall within paragraph 292, because they were not “existing staff” of the bank. Such employees would be placed directly onto the revised scales. Accordingly, the appellant, who was appointed on 14 December 1953, should have benefited from the new pay scales from the date of his appointment. As a result, he would be entitled to receive the increments under the new scale on 14 December each year. Specifically, the appellant should have received a monthly payment of Rs 100 for the period from 14 December 1954 to 13 December 1955, and a monthly payment of Rs 106 for the period from 14 December 1955 to 13 December 1956.

In this case the Court observed that the amounts claimed by the appellant, as set out in the schedule annexed to his petition, continued in the same manner for the succeeding periods. Accordingly the Court concluded that the appellant was entitled to a monetary benefit of one hundred forty‑six rupees together with the applicable dearness allowance. This amount represented the benefit prescribed under the Sastry Award, which had remained unpaid to the appellant despite his entitlement. The Court further held that the decision of the Labour Court in Delhi to reject the appellant’s petition was erroneous, because the Labour Court had failed to recognise the appellant’s right to the said sum under the award. Consequently, the Court allowed the appeal, set aside the order passed by the Labour Court, and directed that the sum payable to the appellant be fixed at one hundred forty‑six rupees plus dearness allowance. No order was made as to costs. The appeal was therefore allowed.