Holding

The Court held that while the bank may lawfully deny stagnation increments under the 1995 bipartite agreement, it may not permanently forfeit the appellant's promotion rights; the debarment is limited to two years as per clause 3.8.3(a).

Summary

The appellant, a clerk promoted to Assistant Manager in UCO Bank, sought reversion to his clerical post after more than a year on probation. The bank granted reversion on conditions that he permanently lose any chance of promotion and be denied stagnation increments. The appellant challenged these conditions, arguing they violated the bipartite settlements governing bank employment. The Supreme Court examined the relevant clauses of the 1988 and 1995 bipartite agreements and held that the denial of stagnation increments was permissible, but the condition of permanent forfeiture of promotion was not, as the agreement only allowed a two‑year debarment for reversion during probation. Consequently, the Court set aside the permanent forfeiture condition and limited the debarment to two years, partially allowing the appeal.

Issues considered

Whether the condition of permanent forfeiture of promotion imposed on reversion is consistent with the bipartite agreements dated 13‑4‑1988 and 14‑2‑1995.
Whether denial of stagnation increments upon reversion after more than one year from promotion is authorized by the 1995 bipartite settlement.
Whether a request for withdrawal of reversion made before the employee is relieved from duty is legally effective.
Whether the expiry of a one‑year probation period automatically confers confirmation of the officer.
Interpretation of clause 3.8.3(a) and 3.8.3(b) of the 1988 bipartite agreement regarding debarment from promotion.

Legislation cited

Industrial Disputes Act, 1947s. 18(1), s. 2(p)
Industrial Disputes (Central) Rules, 1957s. 58

Subjects

service lawpromotionreversionprobationbipartite agreementstagnation incrementindustrial disputes actbank servicedebarmentprobation confirmation

Judgment

(2008] 1 S.C.R. 569

C.V. SATHEESHCHANDRAN A
v.
. GENERAL MANAGER, UCO BANK AND ORS .
. (C.A. No. 337 of 2008)
JANUARY 11, 2008
B
[P.P. NAOLEKAR AND LOKESHWAR SINGH PANTA, JJ.]

~- Service Law:
Promotion - Bank service - Promotion of appellant-Clerk
in Officer's grade w.e.f. 1-8-1997 - Promotion order provided c
that Appellant would be on probation for one year which could
be extended upto two years in Bank's discretion - Subsequent
transfer - Representation filed by Appellant on 3-3-1999
seeking reversion - Acceptance by Respondent Bank subject
to conditions that appellant would forfeit permanently chances D
for promotion to officer's cadre and also become disentitled
-1 for stagnation increments .:.. Challenge against - Held:
Request for reversion having been made after one year of
"
promotion, condition regarding disentitlement for stagnation
increments was in accordance with bi-parlite agreement dated E
14-2-1995 and cannot be interfered with - However, the
condition regarding permanent forfeiture of promotion was not
in accordance with the biparlite agreement dated 13-4-1988 '""
I There was. no automatic confirmation of Appellant after. one
year- Reversion was sought for and granted to Appellant on F
-~

... his request during period of probation - Appellant's case was
governed by Clause 3. 8.3(a) of the biparlite agreement dated
13-4-1988 whereunder, he could be denied future promotion
only for two years - Industrial Disputes Act, 1947 - ss:2(p) &
18(1) - Industrial Disputes (Central) Rules, 1957 - r. 58 - Bi-
G
parlite agreement dated 13-4-88; Clauses 3. 8. 2 and 3. 8. 3 and
Bi-parlite agreement dated 14-2-95; Clause 5(c)(ii).
·-t
Appellant, Clerk in UCO Bank, was promoted to
Officer's cadre in the rank of Assistant Manager w.e.f 1-8-
569 H
570 SUPREME COURT REPORTS [2008] 1 S.C.R.

A 1997. The promotion order specifically provided that he
would be on probation for one year and the period of
probation could be extended upto two years in the Bank's
discretion. Appellant was subsequently transferred. On
3-3-1999, Appellant filed representation seeking reversion
B to original post in clerical cadre which Respondent Bank
accepted on the condition that Appellant would forfeit
permanently chances for promotion to officer's cadre and
would also become disentitled for stagnation increments.
Prior to his being relieved from his duty as Officer,
c Appellant filed application seeking withdrawal of the
request for his reversion. Respondent Bank rejected the
application. Appellant filed writ petition challenging the
reversion order which was dismissed.
In appeal to this Court, the question which arose for
D consideration is whether the consequential effect of
reversion viz, conditions regarding permanent forfeiture
of promotion and disentitlement to. get stagnation
increments were in accordance with the bi-partite
agreements entered into between the Bank and its
E workmen dated 13-4-1988 and 14-2-1995.
Partly allowing the appeal, the Court
HELD: 1.1. Appellant was promoted to the post of
officer on 1-8-1997. He had moved an application for
F reversion on 3-3-1999, which is apparently beyond the
period of one year. As per the bi-partite agreement dated
14-2-1995, an employee shall not be entitled to seek •
stagnation increment if he has been reverted on his own
request after one year from the date of promotion. Thus,
G the said term of agreement authorizes the Bank to stop
the stagnation increment of the employee who has been
reverted on his own request after one year of his
promotion. In the present case, Appellant's application
requesting for reversion having been made after a period
of one year from the date of promotion, the order of
H

. '
C.V. SATHEESHCHANDRAN v. GENERAL MANAGER, 571
UCO BANK AND ORS.

reversion passed by the Bank to deny stagnation A
increments to the appellant is in accordance with the
agreement between the parties and cannot. be interfered
. with. However, in the matter of stopping the promotion
for all times to come, ithe order of the Bank is not in
accordance with the bipartite agreement dated 13-4-1988. B
[Paras 6, 7] [577-G; 578-A, B, C, DJ
1.2. Under Clause 3.8,2 of the bi-partite agreement
dated 13-4-1988,.
on promotion
'
to the officers' cadre, the
employee would be on probation for a period of one year
and the period of probation may, if necessary, be C
extended to a total period of two years in the discretion of
the Bank. Clause 3.8.2 does not provide for automatic
confirmation of the probationer after a period of one year.
The absence of extension of the period of probation would
not be construed to be the confirmation of the officer on D
completion of period of one year under Clause 3.8.2. In
the p'resent case, there is nothing on record to indicate
that on completion of the period of one year by the
appellant on the post of officer, the Bank has confirmed
him on the post of officer. Therefore, he was continued E
on the post of officer as probationer when he m<1de the
request for his reversion to the post of Clerk. [Paras 9, 1OJ
[578-F, G; 579-E, FJ
1.3. Under sub-clause (b) of Clause 3.8.3 of the
bipartite agreement dated 13-4-1988, when an employee F
seeks reversion after the expiry of probation period, he
may be allowed reversion on his request in the discretion
of the Bank and if such a request is acceded to by the
Bank, the employee shall have to forfeit permanently his
chances for promotion to officers' cadre. Thus, to forfeit G
chances of promotion to the officers' cadre, the request ·.
for reversion is to be made after expiry of the probation
period. In the present case, the request for reversion,
which was made by the appellant on 3-3-1999, was
although after a period of one year but was during the H
572 SUPREME COURT REPORTS [2008] 1 S.C.R.

A period of probation. The appellant's case will be governed
by sub-clause (a) of Clause 3.8.3 of the bipartite agreement
dated 13-4-1988 whereunder,, when an employee seeks
reversion during the period of probation, he .would be
debarred for promotion for two years from the date of
B reversion and in such a case, he would be reverted to his
substantive cadre which he occupied prior to his
promotion
. .. .
on the same' emoluments which he was r
drawing. Therefore, if the reversion is sought for and is
granted to an employee on his request during the period
C of probation, he can be denied future promotion only for
a period of two years. Thus, Appellant can be denied future
promotion only for a period of two years from the date
the order of reversion is made effective. [Paras 8, 11]
[578-D, E, F; 579-G; 580-A, B, C]
·D 2. The submission that the appellant having moved
an application for withdrawal of his request for reversion
prior to his being relieved from the post and reliance
placed on the decisions rendered by this Court on ·the .
point of resignation and voluntary retirement, has no
E application in the present case as those decisions are
based on the legal proposition that unless the employee
is relieved of his duty, after acceptance of offer of voluntary
retirement or resignation, jural relationship of the
employee and the employer does not come to an end. In
F the case of reversion, the said principle has no application.
[Para 12] [580-C, D, E, F] •
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
337of 2008.
From the final Judgment and Order dated 25.6.2004 of
G the High Court of Kera la at Ernakulam in RP. No. 958 of 2003(0)
T.V George, Mathew Kuzhalanadan and Vikram Singh ·
Mawari for the Appellant.
Bishwajit Bhattacharyya, Debashis Mukherjee and
H Ravindra Kumar for the Respondents.
CV SATHEESHCHANDRAN v. GENERALMANAGER, 573
iJCO BANK AND ORS. [P.P. NAOLEKAR, J.]

The Judgment of the Court was delivered by A
P.P. NAOLEKAR, J. Leave granted.
The appellant was employed by UCO Bank (for short 'the
Bank') as Clerk on 28.8.1982. He was promoted as Assistant
Manager with effect from 1.8.1997. The promotion order, among B
· other terms, has specifically provided that he shall be on
~ probation for one year. The period of probation may, if
necessary, be extended upto a total period of two years in the
Bank's discretion, as specified in Clause 3.8.2 of the Promotion
Policy Settlement (PPS) dated 13:4.1988. Vide order dated
6.8.1998, the appellant was transferred to Mavoor where he
c
had joined the service. The appellant, for certain reasons, wanted
the Management of the Bank to revert him to his original post
and made a representation to that effect on 3.3.1999. The request
of the appellant for rev~rsion to the clerical cadre was acceded
to by the respondent Bank vide orders dat.ed 6.5.1999 and D
1 15.5.1999 on the following con!:li:ions:-
"
(1) You shall forfeit permanently your chance for
promotion to officer's cadre;
(2) You shall be posted in the capacity of a Clerk E
notwithstanding your occupying any functional special
allowance post prior to your promotion;
(3) . Your name will be included in the common seniority
4
. list of eligible employees in the clerical cadre for
selection to functional special allowance posts under
bipartite settlements after five years from
F

the date of such reversion;
(4) On reversion, you shall work in both Cash and
Accounts Department;
G
You will not be eligible for stagnation increment(s).
The order dated 15.5.1999 further stipulated that he shall
be relieved immediately and can join atthe new place of posting
after availing permissible joining time. The reversion of the
appellant was subject to Clause 3.8.3(b) of the PPS dated H
574 SUPREME COURT REPORTS [2008] 1 S.C.R.

A 13.4.1988 and Clause 5(c)(ii) of the Bipartite Settlement dated
14.2.1995.

2. After the acceptance of the reversion of the appellant by
the respondent Bank, the appellant was relieved on 28.10.1999.
Prior to that, an application was moved by the appellant on
B 7 .6.1999 to the effect that he may be permitted to withdraw the
request for his reversion. The respondent Bank did not accept ,.
the request made by the appellant. That led the appellant to
approach the Court by filling a writ petition. It was contended in
the writ petition that the conditions regarding permanent
c forfeiture of promotion and ineligibility to get stagnation
increments are the conditions which marred the prospects of
the petitioner in his service career and are unconstitutional and,
therefore, be struck down. It was also contended that the
petitioner's request of withdrawal of his request for reversion
D should have been considered by the Bank and appropriate order
passed. The petitioner prayed for quashing of the order of ~
reversion passed by the respondent Bank reverting him to the "
clerical cadre. The learned Single Judge of the High Court
dismissed the writ petition refusing the prayer for quashing the
E reversion order.
3. Aggrieved by the said order, the writ petitioner filed a
writ appeal. The writ appeal was allowed by judgment dated
6.11.2003 and the Division Bench of the High Court held that
the appellant was entitled to stagnation increments and there t
F was no justification for forfeiting his chances of promotion to ~
the officer's cadre. The order of reversion of the appellant was
also set aside and the respondent Bank was directed to post
the appellant as an officer of the Bank with all consequential
benefits. Thereafter, the respondent Bank filed a review petition
G praying for review of judgment dated 6.11.2003 passed by the
writ appeal court. The review court found factual errors in the
judgment and on the basis of such factual errors, the application
of law was found to be improper, and with these findings, the
Court came to the conclusion that the judgment of the Division
H Bench allowing the writ appeal was not in accordance with law.
C.V. SATHEESHCHANDRAN v. GENERAL MANAGER, 575
UCO BANK AND ORS. [P.P. NAOLEKAR, J.]
.J
On that basis, the judgment of the Division Bench in writ appeal A
was set aside and in consequence thereof the writ petition filed
by the appellant dismissed. Being aggrieved, the appellant is
before us in the present appeal.
4. It is contended by the learned counsel for the appellant
· that the impugned order of the Division Bench of the High Court B
-' approving and confirming the decision taken by the respondent
Bank denying the future increments to the appellant and marring
his chances of future promotion is not in accordance with law. It
is also contended by the learned counsel that the respondent
Bank should have acceded to the request of the appellant for c
withdrawal of request of reversion when such a request was
made prior to his actual relieving from duty as an officer of the
respondent Bank and relied upon certain decisions wherein this
Court has considered the aspect of resignation and voluntary
retirement before the date of actual release from service. D
~
"'!
5. The learned counsel for the respondent Bank has urged
that the order of reversion and the consequential effect of
stagnation and stoppage of future promotion are in accordance
with the bipartite agreements' entered into between the
Management and the Union and, thus, the order of the High Court E
in review was in accordance with law and does not require any
interference.
.. 6. To understand the submissions made by the learned
'
·t counsel for the parties, it would be appropriate to consider the F
agreements entered into between the Management of the
respondent Bank and the different Unions of the Bank. In the
Memorandum of Settlement arrived at on 13.4.1988 under
Section 2(p) and Section 18(1) of the Industrial Disputes Act,
1947 read with Rule 58 of the Industrial Disputes (Central) Rules,
G
1957 between the Management of the Bank and its workmen
as represented by the All India United Commercial Bank
Employees Federation, C!<!use 3.8.2 relates to 'probation' and
Clause 3.8.3 relates to 'reversion'. Clause 3.8.2 and Clause
3.8.3, which are relevant, read as under:-
H
576 SUPREME COURT REPORTS [2008] 1 S.C.R.

L
A "3.8.2 Probation:
On promotion to the Officers' cadre an employee
would be on probation for one year. The period of probation
may, if necessary, be extended upto a total period of 2
years in the Bank's discretion. Any defects or deficiencies
B observed during the period of probation shall be brought
to the notice of the employee, in writing, so that he may
have an opportunity to remove the defects or deficiencies
and show sufficient improvement to merit confirmation as
Officer. Where, inspite of such opportunity being given to
c him, he fails to remove the defects or deficiencies and
show sufficient improvement and make good as an officer,
the Bank, after notice to him will be entitled to revert him
to the cadre, to which he belonged prior to his promotion,
on the emoluments that he would have drawn, had he not
D been promoted."
"3.8.3 Reversion
(a) Where an employee on promotion to officers' cadre
refuses the promotion or seeks reversion during the
E · period of probation, he would be debarred for
promotion for two years from the date of such refusal/
reversion. In such case he would be reverted to his
substantive cadre which he occupied prior to his
promotion on emoluments that he would have drawn
F in that cadre as if he was not promoted.
(b) Employee who seeks reversion after the expiry of
probation period may be allowed reversion at the
discretion of the Bank. In such case the concerned
employee shall forfeit permanently his chance for
G promotion to officers' cadre, and shall be posted in
the capacity of a clerk, notwithstanding his occupying
any functional special allowance post prior to his
promotion. His name will be included in the common
seniority list of eligible employees in the clerical cadre
H
C.V. SATHEESHCHANDRAN v. GENERAL MANAGER, 577
UCO BANK AND ORS. [P.P. NAOLEKAR, J.)

for selection to functional special allowance posts A
under Bipartite Settlements after five years from
the date of such reversion.
Note: On reversion under both 3.8.3 (a) & (b) above, such
employees will work in Cash and Accounts Department."
B
In the Memorandum of Settlement dated 14.2.1995
~
between the Managements of 56 'A' Class Banks as
represented by the Indian Banks' Association and their workmen
as represented by the All India Bank Employees' Association,
· National Confederation of Bank Employees, Bank Employees' c
Federation of India and Indian National Bank Employees'
Federation, under Section 2(p) and Section 18(1) of the
Industrial Disputes Act, 1947 read with Rule 58 of the Industrial
Disputes (Central) Rules, 1957, Clause 5 relates to 'stagnation
increments', which reads as under:
D
-1 "5. Stagnation Increments
.. )()()( )()()( )()()(

(c) In supersession of Clause 1(ii)(b) of Bipartite
Settlement dated 81h September, 1983 read with E
'Note' to Clause 4B of Bipartite Settlement dated
101h April, 1989,

. (i) Refusal to accept' promotion at any stage or
'
Ii reversion within a year of promotion, wherever
permissible under Bank's rules will not dis-entitle an
employee from getting stagnation incremenUs.
F

(ii) An employee shall not be eligible for stagnation
incremenUs, if he, after accepting promotion, seeks,
and is granted, reversion after one year from the
G
~ date of promotiqn.
)()()( xxx. xxx"
· The bipartite agreements are binding upon both the Bank
and the appellant. The appellant was promoted to the post of H
578 SUPREME COURT REPORTS [2008] 1 S.C.R.

A officer on 1.8.1997. He had moved an application for reversion
on 3.3.1999, which is apparently beyond the period of one year
and as per the agreement dated 14.2.1995, an employee shall ·
not be entitled to seek stagnation increment if he has been
·reverted on his own request after one year from the date of
B promotion. Thus, the said term of agreement authorizes the Bank
to stop the stagnation increment of the employee who has been
reverted on his own request after one year of his promotion.

7. In the present case, the appellant's application
requesting for reversion having been made after a period of
C one year from the date of promotion, the order of reversion
passed by the Bank to deny stagnation increments to the
appellant is in accordance with the agreement between the
parties and cannot be interfered with. However, in the matter of
stopping the promotion for all times to come, we are of the view
D that the order of the Bank is not in accordance with the bipartite
agreement dated 13.4.1988.
8. Under sub-clause (a) of Clause 3.8.3 of the bipartite
agreement, when an employee seeks reversion during the
E period of probation, he would be debarred for promotion for
two years from the date of reversion and in such a case, he
would be reverted to his substantive cadre which he occupied
prior to his promotion on the same emoluments which he was
drawing. Therefore, ifthe reversion is sought for and is granted
to an employee on his request during the period of probation, t
F he can be denied future promotion only for a period of two years. •
9. Under Clause 3.8.2, on promotion to the officers' cadre,
the employee would be on probation for a period of one year
and the period of probation may, if necessary, be extended to a
G total period of two years in the discretion of the Bank. Clause
3.8.2 does not provide for automatic confirmation of the
probationer after a period of one year. The confirmation would
not occur automatically by efflux of time. The order of
appointment also does not clearly indicate that the confirmation
of the appellant on the officer's post would automatically follow
H
C.V. SATHEESHCHANDRAN v. GENERAL MANAGER, . 579
UCO BANK AND ORS. [P.P. NAOLEKAR, J.]

9~ at the end/expiry of the period of one year. The service rules, A
which we have mentioned, do not specifically provide for such
eventuality. The expiry of the probation period does not
necessarily mean confirmation. At the end/expiry of the period
of probation, normally an order confirming the officer is required
to be passed and if no such order is passed, he shall be deemed 8
to have continued on probation unless the terms of appointment
or the relevant rules governing the service conditions provide
1 otherwise.
10. The order of appointment of. the appellant provides :
that he has been promoted to the officers' cadre in Junior C
Management Grade Scale-I in conformity with the provisions of
Clause 3.6.1 of the PPS dated 13.4.1988 and that he would be
on probation for one year. The period of probation may, if
necessary, be extended upto a total period of two years in the
.
discretion of the bank, as specified in Clause 3.8.2 of the PPS. D
dated 13.4.1988. If the officer is to be confirmed on the post, .
-{ there should be a specific order of confirmation issued by- the
.. Bank. Simply because the period of one year has expired on
the post as probationer, it does not necessarily mean that his
probation period has expired. Underth&Clause itself, the period E
of probation could be extended upto a period of two years. The
absence of extension of the period of probation would not be
construed to be the confirmation of the officer on completion of
.period of one year under Clause 3.8.2. There is nothing on record
to indicate that on completion of the period of one. year by the F

i appellant on the post of officer, the Bank has confirmed him on
the post of the officer. Therefore, he was continued on the post
of officer as probationer when he made the request for his .
reversion to the post of Clerk.
11. Under sub-clause (b) of Clause 3.8.3 of the bipartite G
agreement, when an employee seeks reversion after the expiry
i of probation period, he may be allowed reversion on his request
in the discretion of the Bank and if such a request is acceded to
by the Bank, the employee shall have to forfeit permanently his
chances for promotion to officers' cadre. Therefore, if the F"
580 SUPREME COURT REPORTS [2008) 1 S.C.R.

A promotee officer has made a request after the expiry of the
probation period, he has to give up all chances of future
promotions to the officers' cadre. Thus, to forfeit chances of
promotion to the officers' cadre, the request for reversion is to
be made after expiry of the probation period. In the present case,
B the request for reversion, which was made by the appellant on
3.3.1999, was although after a period of one year but was during
the period of probation. The appellant's case will be governed
by sub-clause (a) of Clause 3.8.3 of the bipartite agreement
and, thus, he can be denied future promotion only for a period
c of two years from the date the order of reversion is made
effective. The order of the Bank debarring the appellant of all
future promotions to the higher rank of Officer beyond the period
of two years is, therefore, illegal and requires correction.
12. The submission of the learned counsel for the appellant
D that the appellant having moved an application for withdrawal
of his request for reversion prior to his being relieved from the
· post and reliance placed on the decisions rendered by this Court
on the point of resignation and voluntary retirement, has no
application in the present case._Those decisions are in relation
E to resignation and voluntary retirement and are based on the
legal proposition that unless the employee is relieved of his duty,
after acceptance of offer of voluntary retirement or resignation,
jural relationship of the employee and the employer does not
come to an end. In the case of reversion, the said principle has
F no application and, thus, cases on that aspect have no relevance
in the present case.
14. For the aforesaid reasons, the appeal is partly allowed.
The order of reversion imposing a condition that the appellant
shall forfeit permanently his chances for promotion to the officers'
G cadre is set aside and it is directed that he shall forfeit his
a
chances for promotion to the officers' cadre only for period of
two years from the date of the order of reversion.
B.B.B. Appeal partly allowed.
H