STATE BANK OF INDIA ETC. versus KASHINATH KHER AND ORS. ETC.

Citation: [1996] 2 S.C.R. 324 · Decided: 08-02-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
STATE BANK OF INDIA ETC. 
v. 
KASHINATH KHER AND ORS. ETC. 
FEBRUARY 8, 1996 
B 
[K. 'RAMASWAMY AND G. B. PATTANAIK, JJ.] 
Se1vice Law : 
State Bank of India Act, 1955/State Bank of India Officers (Detemiina-
C tion of Temis and Conditions of Service) Order, 1979: 
S.43( 1)-Rule 17-Promotion from MMGS-II to MMGS-
III-Eligi.bility aite!ia:--Guidelines issued from time to time by way of cir-
culars-Minimum two years in "line assignment" and three years in rural/semi 
urban servic~Board anwigi.ng three lists-List 'A' consisting of officers who 
D have completed required service of line assignment-List 'B' consisting of 
officers who have partly completed the two years se1vice--Officers who have 
not completed the rural or semi-urban service not included in list 'B'--Board 
gi.ving an opportunity to the Officers who are othe1wise eligi.ble to complete 
the requisite conditions-On completion of the requisite service gi.ving promo-
tions-Held : The procedure adopted just, fair and reasonabl~ot violative 
E of Art. 14 of the Constitution-Bank would identify the Officers who volun-
talily did not opt to serve in the line assignment of rural/semi-urban service 
and eliminate such officers from list 'B'-Thereafter to consider the officers 
within the zone of consideration of all the officers in Lists 'A' and 'B' together 
and co_nsider them for promotion subject to other relevant crite!ia-Directions 
issued. 
F 
Mohd. Usman & Ors. v. State of Andhra Pradesh & Ors., [1971) Suppl. 
SCR 549 and Y.V. Rangaiah v. /. Sreenivasa Rao, [1983] 3 SCC 284, 
distinguished. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4230-31 
G of 1994 Etc. 
From the Judgment and Order dated 16.4.93 of the Madhya Pradesh 
High Court in M.P. No. 1965 of 1990 and 2091 of 1990. 
· 
R.F. Nariman, R.N. Keshwani, K. Balasubramaniam, AV. Rangam 
H and A Ranganadhan for the appellants. 
324 
~ 
I 
--
STATE v. KASHINATH KHER 
325 
Mrs. Nisha Bagchi and Ms. Indu Malhotra for the Respondents. 
A 
S.K. Mehta, Dhruv Mehta and Fazlin Anam for Intervenor. 
The following Order of the Court was delivered : 
These appeals by special leave arise from the orders of the Division 
Bench of the Madhya Pradesh High Court made on August 27, 1993 in 
Misc. Petition Nos. 1965/90 and 2091/90. The facts not in dispute are that 
the respondents while working as Middle Management Grade Scale II 
officers (for short, "MMGS-II") in the State Bank of India, its Bhopal Circle 
have challenged the policy of the appellant-Bank dated March 21, 1990 and 
August 6, 1990 whereunder the officers who have not completed two years 
of line assignment and two years Rural/Semi-urban service were to be 
considered eligible for promotion to Middle Management Grade Scale III 
(for short,"MMGS-III"). The High Court has held that they are ineligible 
and such a clubbing of ineligible officers with eligible officers is violative 
B 
c 
of Article 14 and accordingly struck down the criteria and given directions D 
in the order. Calling in question of the said order, these appeals by special 
leave came to be filed. 
The Preamble of the State Bank of India, Act 23 of 1955 (for short, 
the "Act") envisages establishment of the State Bank of India (for short, 
the "Bank") for extending banking facility on a large scale more particularly E 
in the rural/s3mi urban area and for diverse other public purposes. Section 
43(1) of the Act gives power to the Bank to appoint such number of 
officers, advisers or employees as it considers necessary or desirable for 
the efficient performance of its functions and to determine the terms and 
conditions of their appointment and service. Regulation 55 of the State F 
Bank of India General Regulations (for short, the "Regulations") provide 
the power of the Local Board ill respect of the staff. Regulation 55(2)(a) 
envisages that appointing and/or promoting authority for various 
categories/Grades of officers and employe"es shall be such as the Executive 
Committee may by general or special order designated from time to time. G 
The operation of the Bank is regulated by the Board of Managing Directors 
of the Bank which empowers appointment of the Committee. The Manag-
ing Committee consists of the Chief General Manager and such of the 
officers designated thereunder. It would appear that the Board or Manag-
ing Committee issues policy directions from time to time. The State Bank 
of India Officers (Determination of Terms and Conditions of Service) H 
326 
SUPREME COURT 

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