A.I. REG. RURAL BANK OFFICERS FED. AND ORS. versus GOVERNMENT OF INDIA AND ORS.

Citation: [2002] 2 S.C.R. 318 · Decided: 07-03-2002 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Disposed off
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
A.I. REG. RURAL BANK OFFICERS FED. AN,D ORS. 
... 
v. 
~-
GOVERNMENT OF INDIA AND ORS. 
MARCH 7, 2002 
B 
[G.B. PATTANAIK, S.N. PHUKAN AND S.N. VARIAVA, JJ.] 
Service Law: 
Regional Rural Banks Act, 1976: Section 17. 
-<· 
c 
Pay Scales-Regional Rural Banks (RRBs) and Nationalised Commercial 
Banks (NCBs)-Employees of-Parity between-Paragraph (i) of Central 
Government Notification stipulated parity of pay scales between employees of 
RRBs and NCBs but paragraphs (ii) and (iii) made payment of current increase 
D in salary and arrears dependent upon cash outflow which was not to exceed 
50% of the operating profit in a particular year-Validity of-Held, Paragraph 
(i) valid and should be immediately implemented-But paragraps (ii) and (iii) 
quashed-Arrears to be paid in three equal annual instalments i.e. on 30.4.2002, 
' > 
30.4.2003 and 30.4.2004-Arrears not to be made dependent on cash outflow-· 
There cannot be any distinction between RRBs incurring loss and RRBs making 
E profit-However, first instalment to be deposited in the employees' provident 
fund account-But the other instalments to be paid in cash-Government of 
India, Ministry of Finance, Department of Economic Affairs (Banking Division) 
Notification dated 11.4.2001. 
-\ 
F 
Contempts of Courts Act, 1971: 
Section 2(b)-Civil Contempt-Government issued notification pursuant 
to judgment of Supreme Court-But the notification not found to be in 
compliance with the said judgment-Held, Although the notification is in direct 
contravention of Supreme Court judgment no action is proposed agqinst the 
G 
alleged contemnors as the case is not one of deliberate viO/ation. 
::r 
The respondent-Government of India, Ministry of Finance, Department 
of Economic Affairs (Banking Division), pursuant to a judgment of this Court 
'· 
(CA No. 2218of1999), issued a notification dated 11-4-2001. Paragraph (i) 
of the said notification stipulated parity of pay scales between employees of 
H Regional Rural Banks (RRBs) and Nationalised Commercial Banks (NCBs), 
318 
---
A.I. REG. R.URAL BANK OFFICERS FED. v. GOVERNMENT OF 1NDIA 
3) 9 
but paragraphSc(li) and (iii) made payment of current increase in salary and A 
arrears dependent upon cash outflow. 
· · 
The petitioners filed the present contempt petition on the ground that 
the notification was contrary to the judgment of this Court and was wilful 
disrespect to and, in deliberate violation of, the judgment and directions of 
this Court. 
B 
On behalf of the respondents it was contended that the Government . 
faced a severe financial crisis and, th.erefore, the monetary benefit of the 
employees of RRBs would have to be so modulated that the RRBs were not 
ultimately closed down by merely paying the salaries of the employees. 
Disposing of the petition, the Court 
c 
HELD : 1. The issuance of the notification dated 11-4-2001 by the 
Government of India, Ministry of Finance, Department of Economic Affairs 
(Banking Division) cannot be held to be in compliance with the judgment and 
directions of this Court in CA No. 2218 of 1999. But at the same time, the D 
appropriate authority need not be punished under the provisions of the 
- Contempt of Courts Act, 1971, even if the notification is in direct contravention 
of the judgment of this Cour;t, as this is not a case of deliberate violation. 
Therefore, no action is proposed against the alleged contemnors. (324-F-GI 
2.1. The financial capa~ity of the Government cannot be pleaded as a E 
ground for non-implementation of the directions of the Court. Since financial 
capacity of the employer cannot be held to be a germane consideration for 
determination of the wage structure of the employees and the Parliament 
enacted the Regional Rural Banks Act, 1976 for bringing into existence the 
Regional Rural Banks (RRBs) with the idea of helping the rural mass of the p 
country, the employees of such RRBs cannot suffer on account of the financial 
incapacity of the employer. (324-F( 
• 
2.2. Paragraph (i) of the notification dated 11-4-2001 should be 
immediately implemented and the employees should be paid accordingly. 
Paragraphs (ii) and (iii) of the notification are quashed and the Central G 
Government is directed to issue a fresh notification for proper implementation 
of the judgment of this Court. (325-AI 
2.3. The arrears of salary accruing to the employees should be paid to 
them in three equal annual instalments, the first being on 30-4-2002, the second 
on 30-4-2003 and
Excerpt shown. Read the full judgment & AI analysis in Lexace.