V.K. RAMA RAO AND ORS. versus NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT THROUGH ITS MANAGING DIRECTOR, POONAM CHAMBERS, WORLI, BOMBAY AND 18 ORS.

Citation: [1989] SUPP. 2 S.C.R. 501 · Decided: 14-12-1989 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Dismissed
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Judgment (excerpt)

V.K. RAMA RAO AND ORS. 
v. 
NATIONAL BANK FOR AGRICULTURE AND ·RURAL 
DEVELOPMENT THROUGH ITS MANAGING DIRECTOR, 
POONAM CHAMBERS, WORLI, BOMBAY AND 18 ORS. 
DECEMBER 14, 1989 
[RANGANATH MISRA, P.B. SAWANT AND 
K. RAMASWAMY, JJ.] 
Civil Services-Pay Scales-Fitment of employees in new scales-
To "be done by revising salaries upward-At times additional benefit 
treated as personal pay till merged-Such procedure not discriminatory 
but eminently just and valid. 
A 
B 
c 
In response to the charter of demands concerning the revision of 
pay scales, submitted by the officers of the Respondent Bank, called 
"NABARD Officers' Association", the bank on 9.10.85 revised the pay 
D 
scales of all its officers as per settlement with the Association and gave 
the said revision . retrospective operation w .e.f. 1st February 1984, 
following the same date as was done in the Reserve Bank of India. In 
order to rix the salaries of the employees, who were in employment of 
the Bank of 1-2-1984, the Respondent Bank prepared a refixation chart 
which was duly approved by the NABARD Officers' Association. The 
chart was made applicable to all the officers who were in service of the E 
Bank on 1.2.1984. The chart was a device to fit the salaries of the 
concerned officers in the new revised pay scales. Thus it contained 
fitment increments for the employees in service prior to 1.2.84 to~oid 
reduction in emoluments and anamolies which would otherwise have 
resulted. These increments were to merge in the new scales in the course 
of time as they were not designed to grant higher emoluments to the old F 
employees for all time to come but to avoid anamolies resulting from 
rerixation of salaries into new scales. The Petitioners challenged the 
fitment increments granted to old employees. It was their case that 
these increments gave undue benefit to the old employees as against 
them, and since they occupied the same posts they were also entitled to 
the same fitment increments. They also invoked the theory the 'Equal G 
pay for Equal work' by alleging discrimination between them and the 
old employees. It may be mentioned that the Association had 2284 
members and except the present petitioners no body had made a grie-
vance against the refixation chart. 
Dismissing the Petition, this Court, 
501 
H 
\ 
502 
SUPREME COURT REPORTS 
[1989] Supp. 2 S.C.R. 
I· 
A' 
HELD: Th~ revision of pay is always effected with a particular 
· ' 
date prospectively or retrospectively. Whatever the date from which it 
is effected, it necessarily involves fitment of the salaries of the existing 
employees in the new scales. A retrospective operation of the new scales 
·-therefore Involves, for the same purpose, a classification of employees 
__ B' · into two categories· viz., those who were In service prior to the 
retrospective date, and those who entered the service thereafter. If the 
benefit of the revised pay scales is to be conferred equitably on the old 
\ 
and the new employees, tbe litment of salaries is in evitabte. 10 avoid it 
is to deny the equal benefit of the revised scales to the employees in 
senice prior to the date from which the new scales came into effect. (506B-C] 
C 
The fitment/a.:justment in the new scales further, has to be done 
by revising the salaries upward. This sometimes necessarily Involves 
fitment in a higher stage in the pay scale than what the employee would 
be entitled to by a strict application of the stage to stage adjustment •. 
/ Sometimes the additional benefit is treated as personal pay till it gets 
0 
merged in the next higher increment. This is a known practice of equit-
able adjustment of the old pay scales to ihe new pay scales. There is not 
other way of effecting the just and required adjustment. (5060-E] 
E 
The adjustment increments grilnted to the old employees on such 
occasions automatically achieve the dual purpose of rewarding them for 
their past service and of adjusting their salaries_ in the new scale. The 
adjustment, fitment Increments are therefore not discriminatory but 
eminently just and valid. [5 I2F] 
· 
· 
' 
K.N. Ananda & Ors. v. The Karnataka State Financial Corpora· 
tion, Bangalore & Anr., li985] Laoour & Industrial Cases Vol. 18 p. 
F 
1079;-P., Savita S/o Shri P.L. Savita v. Union of India, Ministry of 
'··" . Defence ( Deptt. of Defence Production) New Delhi & Ors., [1985] I 
' 
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• 
··Suppl. SCR IOI; D.S. Nakara & Ors v. Union of India, (1983] 2 SCR 
Ii.S;·State .. Government Pens
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