THE STATE BANK OF INDIA & ORS. versus RAVINDRA NATH & ORS.

Citation: [2019] 2 S.C.R. 121 · Decided: 12-02-2019 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Appeal(s) allowed

Judgment (excerpt)

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THE STATE BANK OF INDIA & ORS.
v.
RAVINDRA NATH & ORS.
(Civil Appeal No. 12367 of  2017)
FEBRUARY 12, 2019
[UDAY UMESH LALIT AND HEMANT GUPTA, JJ.]
State Bank of India Act, 1955: s.18 – Re-fixation of salary
– Respondent joined the appellant bank in 1981 and on 24.6.2001,
he was posted at Johannesburg as Manager on a salary of USD
1965 per month but subject to change from time to time – In the
letter of posting, there was a clause that salary as well as other
terms and conditions spelt out in the letter were subject to review
and revision by the bank from time to time – On 16.1.2001, the
salary in respect of the respondent was re-fixed as USD 1300 and
same was subsequently revised to USD 1380 – The stand of the
bank was that when the respondent was posted at  Johannesburg,
the salary was fixed on Consumer Price Index of 1992 on the basis
of directives of the Working Group of the Standing Committee w.e.f
1.1.1995 in the absence of the availability of Cost of Living Index
but since the relevant data became available in March 2000, the
Working Group in its meeting held on 15.1.2001, refixed the salary
based on formula approved by the Standing Committee and that
these recommendations of the Working Group were binding on all
public sector banks in respect of the officers posted abroad – High
Court held in favour of respondent on the ground that the respondent
did not have privity of contract with the Standing Committee on the
basis of which the salary was reduced and that the letter did not
remotely suggest that the salary of USD 1965 was tentative – On
appeal, Held: The respondent as an Officer of the Bank is bound
by the salary structure approved by the Bank for its Officers – The
decision of the Standing Committee is a part of the decision-making
in respect of salary payable to the employees of the Banks – The
employee of a Bank has no right that he should be associated with
the decision-making process in respect of the fixation of salary –
However, if the question of reasonableness of salary arises, then in
exercise of power of judicial review, the Court may examine the
decision-making process – In exercise of power of judicial review,
there was no infirmity in the decision of Standing Committee taken
[2019] 2 S.C.R. 121
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on 15.01.2001 in pursuance to the direction of the Government of
India issued under s.18 of the Act –  Since, the salary was fixed for
all Officers of the Public Sector Banks in a non-discriminatory
manner keeping in view the Cost of Living Index, the High Court
erred in law in setting aside the reduction in salary – There was
reasonable basis of reduction of salary – Moreover, there was no
promise ever made to the respondent that his salary of US $ 1965
shall remain unchanged during the period of his posting – In fact,
it was categorically mentioned that the salary as well as perquisites
were subject to change from time to time – Therefore, mere fact that
the salary was changed subsequently, it will not confer any legally
enforceable right in favour of the respondent to challenge the same
on the ground that the same is arbitrary or unjust.
Allowing the appeal, the Court
HELD : 1. The relevant conditions in the letter of posting
showed that salary of US $ 1965 was not promised to be paid for
the entire period of posting in Johannesburg. It was subject to
change either way that is increase or decrease.  The Bank had
explained that such salary of US $ 1965 was fixed in absence of
Cost of Living Index on the basis of recommendations of the
Committee. Later, the Standing Committee was constituted in
exercise of the powers under Section 18 of the State Bank of
India Act, 1955 mandating that any change in future in the salaries
and perquisites and other service conditions has to be affected
with the prior approval of the Standing Committee. In view of
such directions, the appellant Bank framed service conditions
and allied matters.  It was thereafter on 15.1.2001, the
Working Group of the Standing Committee decided the salary
payable to the Officers of the Bank. Such salary
structure was meant for all Officers of Public Sector Banks posted
abroad. Such recommendations were 
applicable in
non-discriminatory manner to all Officers of the Public Sector
Banks. [Paras 15, 16][128-F-G, 129-B-C]
2.  Though, certain representations were said to have been
made by the Chief Executive Officer on behalf of th

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