Supreme Court of India

CENTRAL BANK OF INDIA AND ORS.versusMADAN CHANDRA BRAHMA AND ANR.

Citation: 2007 INSC 856
Decided: 22 August 2007
Disposal: Appeal(s) allowed
Bench: K G BALAKRISHNAN

Holding

The respondent was bound to retire at the age of 58; clause 1.3 of Regulation 19 applies.

Summary

Madan Chandra Brahma was appointed temporarily in Gauhati Bank in 1969 and later promoted to officer. After successive mergers, he became an officer of Central Bank of India in 1990. He claimed retirement at age 60, invoking clause 1.2 of Regulation 19 of the Central Bank of India (Officers) Service Regulations, 1979, arguing he was recruited before 19 July 1969. The bank retired him at 58 under clause 1.3, and the High Court initially dismissed his claim but the Division Bench allowed it, granting arrears. The Supreme Court held that, because he became an officer of the bank only after the 19 July 1969 cut‑off, clause 1.3 applied and he was required to retire at 58. The Court set aside the High Court decision, dismissed the writ petition, but awarded him an ex gratia sum of Rs 1 lakh under Article 142 for the litigation endured.

Issues considered

The correct interpretation of clause 1.2 versus clause 1.3 of Regulation 19 regarding retirement age for officers recruited before or after 19 July 1969.
Whether an employee who becomes an officer of the bank by amalgamation is deemed to have been recruited before the statutory cut‑off date.
The effect of Section 45 of the Banking Regulation Act, 1949 on service conditions after amalgamation.
The propriety of granting ex gratia compensation under Article 142 of the Constitution.

Legislation cited

Banking Regulation Act, 1949s. 45(5), s. 45(7)
Constitution of Indias. Article 142

Subjects

service lawretirement agebank amalgamationsuperannuationservice regulationsBanking Regulation Actex gratiaArticle 142interpretation of service rules

Judgment

CENTRAL BANK OF INDIA AND ORS. A
v.
MADAN CHANDRA BRAHMA AND ANR.

AUGUST 22, 2007

[K.G. BALAKRISHNAN, CJI AND P.K. BALASUBRAMANYAN, J.] B

Service Law:

Central Bank of India (Officers) Service Regulations, 1979-Regulation
19-Clause 1.3-Retirement age-Respondent promoted as an officer in 1975 C
in Gauhati Bank-Gauhati Bank merged with Purbancha/ Bank and
respondent became Officer of Purbanchal Bank-On 19. 7.1969, Purbanchal
Bank merged with appellant-Bank under Scheme ofamalgamation-Appellant-
Bank retired him on his attaining 58 years-Writ petition by respondent
seeking retirement on attaining age of 60 years-Allowed by High Court- D
Correctness of-Held: High Court erred in holding that respondent was
entitled to continue in service till the age of 60 years-As respondent was
recruited only after 19.7.1969, Clause 1.3 of Regulation 19 would apply--
Respondent bound to retire on attaining age of 58 years hence not entitled
to relief claimed by him-However, in the circumstances and in exercise of
jurisdiction under Article 142 of the Constitution, he deserves to be E
compensated as he had been fighting on question of interpretation of
Regulation and had remained in courts for considerable time, due to divergence
in the views of the High Court-Appellant directed to pay sum of Rs. I /akh
to respondent as ex gratia-Banking Regulation Act, 1949-s.45(7)-
Constitution of India, 1950-Article 142. F
On 9.6.1969, Respondent No.I was appointed temporarily as an Assistant
in Gauhati Bank. On 19.7.1969, the appellant Bank alongwith other Banks
were nationalized. On 1.8.1975, the Gauhati Bank was merged with
Purbanchal Bank. The age of superannuation in the Purbanchal Bank was
58 years. Respondent No.I who had meanwhile been confirmed in the Gauhati G
Bank, had been promoted on 1.7.1975 as an officer in that Bank. On
amalgamation, respondent No. 1 thus became an officer of the Purbanchal
Bank with effect from 1.8.1975. On 29.8.1990, the Purbanchal Bank merged
with the appellant Bank under a Scheme of Amalgamation under the Banking

275 H
276 SUPREME COURT REPORTS [2007) 9 S.C.R.

A Regulation Act, 1949.
Respondent No.I claimed that he would retire only on attaining the age
of 60 years, as per Regulation 19 of the Central Bank of India (Officers)
Service Regulations 1979 on the basis that his original appointment in the
Gauhati Bank was on 9.6.1969. The appellant Bank did not accept this stand
B of respondent No. 1 and retired him on his attaining" the age of 58 years.
Respondent no.I filed writ petition before the High Court and it was allowed.
Hence the present appeal.

Allowing the appeal, the Court

C HELD: 1. The High Court was in error in holding that respondent No.
I was entitled to continue in service in the appellant Bank till he attained the
age of 60 years and was entitled to monetary benefits on tha.t basis. On a plain
reading of Regulation 19 of the Central Bank of Indfa (Officers) Service
Regulation, 1979, respondent No. 1 was bound to retire on attaining the age
D of58 years. (Para 8) (283-El

2. The respondent No. 1 became an officer of the appellant Bank only
on the amalgamation of the Purbanchal Bank with the appellant Bank.
Admittedly, that was on 29.8.1990, well after 19.7.1969. Strictly speaking,
respondent No. I was not recruited in the appellant-Bank, ifthe expression
E 'recruited' occurring in the Regulation is literally c-0nstrued. But obviously
the expression includes those who have become officers of the appellant Bank
by way of amalgamation or merger. Respondent No. 1 could be deemed to have
been recruited to the service of the appellant Bank only after 19.7.1969. If
so, it would be clause 1.3 of R!!gulation 19 that would apply and not clause 1.2
of that Regulation. (Para 6) (281-BJ
F
3. t. The age of superannuation both in the Gauhati Bank and the
Purbanchal Bank, which subsequently got amalgamated with the appellant
Bank, was only 58 years. The notification sanctioning the amalgamation under
Section 45(7) of the Banking Regulation Act is dated 29.8.1990. Clause 10
G provides that employees like the respondent are deemed to have been appointed
by the appellant Bank on the same terms and conditions of service as were
applicable to them before the close of business on 14.7.1990. They were to be
granted the same pay as employees of the appellant Bank and were to hold
office on the same terms and conditions of service that are applicable to the
employees of the appellant Bank. The co1Qmunication from the central office
H dated 6.5.1991 relating to pay and other conditions of service of such officers
CENTRAL BANK OF INDIA v. MADAN CHANDRA BRAHMA 277
has provided for the reckoning of their prior services in the Purbanchal Bank A
on matters specified herein. It does not contemplate the treating of the
employee as having joined the appellant Bank on the day the employee joined
the Purbanchal Bank. Thus, the scheme adopted, worked and accepted by all,
does not provide for treating such an employee as having entered the service
of the appellant Bank even prior to the amalgamation, except for the purposes _B
specified. If at all, the Pay and other service conditions of officers of the
erstwhile Purbanchal Bank Limited dated 6.5.91 gives an indication, it is that
the original date of appointment has relevance only for purposes such as
provident fund, gratuity, sanction of loans, etc. (Para 71 (282-B-El

3.2. In the matter of placement in the appellant bank, the service of one C
and a half years in the Purbanchal Bank has to be·treated as service for one
year only in the appellant bank. The fact that the regulation had been made
applicable, would not mean that such officers must be taken to have been
recruited from the date of their entry in the Purbanchal Bank. The
applicability of the Regulations with effect from 1.4.1991 is subject to
exceptions provided thereunder. It is in that context that the non-reckoning D
of service for one year in Purbanchal Bank as equivalent to service of one
year in the appellant bank assumes significance. In this situation, while
applying Regulation 19, it is not possible to uphold the plea that the respondent
should be taken to have been recruited to the appellant bank prior to 19.7.1969
so as to attract paragraph 1.2 thereof. The right to be treated on par with the
employees of the appellant Bank is one thing, but the right to insist that the E
employee must be deemed to have become an employee of the appellant Bank
even before the amalgamation is another. It may be noted that clause (i) of
sub-section(5) ofS.45 of the Banking Regulation Act, 1949 has only provided
that an erilploye~, such as the respondent, had the right to get the same
remuneration and to have the same terms and conditions of service which F
they were getting or by which they were being governed immediately before
the date of the order of moratorium. The right to be treated on par with the
employees of the appellant Bank cannot extend to a right to be treated as
having entered the service of the appellant Bank even before the very
amalgamation. (Para 71 (282-E-H; 283-A-BI
G
4. The age of superannuation, when respondent No. I joined service in
the Gauhati Bank was 58 years and when that Bank merged with the
Purbanchal Bank, it continued to be 58 years. There is nothing in the
Regulations or the Resolution which would enable respondent No. 1 to claim
that he was entitled to continue until the age of 60 years when the age of H
278 SUPREME COURT REPORTS [2007] 9 S.C.R.

A superannuation of even an officer originally recruited to the appellant Bank
after 19.7.1969 was only 58 years. Even though, respondent No. I may carry
his date of appointment in Gauhati Bank for the purpose of service benefits
to the extent specified, the same does not extend to supporting a claim that he
must be deemed to have been recruited in the Central Bank prior to 19.7.1969.
(Para 8) (283-C-E)
B
Chairman, Canara Bank, Bangalore v. MS. Jasra & Ors., (1992] 2 SCR
68 and B.S. Yadav and Anr. v. Chief Manager, Central Bank ofIndia and Ors.,
(1987) 3 sec 120, relied on.

C 5. Having held on law that the respondent is pot entitled to the relief
claimed by him, some compensation should be directed to be paid to him, in
the circumstances, in exercise of jurisdiction under Article 142 of the
Constitution of India. The respondent was fighting on a question of
interpretation of the Regulation of the appellant bank and has remained in
court for a considerable time. Taking note of the divergence in the views of
D the High Court, in circumstances of the case, it would be appropriate to direct
the appellant to pa>: a sum of Rs. I lakh to the responde~t as ex gratia.
(Para I0) (284-B-D)

CIVIL ~PPELLATE JURISDICTION: Civil Appeal No. 5786 of2000.

E From the final Judgment and Order dated 16.09.1999 of the Division
Bench of the Court Guwahati High Court in Writ Petition in Writ Petition
Appeal No. 504 of I 994.

Sunil Murarka and Dinesh Mathur (for Mis. J.B. Dadachanji & Co.) for
the Appellants. .L
F
Manoj Goel, Shurodeep Roy, Wajiih Sahaiq and Rahul Agarwal for the
Respondents.

The Judgment of the Court was delivered by

G P.K. BALASUBRAMANYAN, J. I. On 9.6.1969, Respondent No. I was
appointed temporarily as an Assistant in Gauhati Bank. On 19.7.1969, the
Central Bank (hereinafter referred to as "the appellant Bank") along with other
banks was nationalized. As per the relevant Regulation, the age of
superannuation was fixed as 58 years in all Nationalized Banks including the
appellant Bank. On 1.8.1975, the Gauhati Bank was merged with the Purbanchal
H
CENTRAL BANK OF INDIA 1·. MADAN CHANDRA BRAHMA [BALASUBRAMANYAN,J.] 279

Bank. The Scheme of Amalgamation between the Gauhati Bank and the A
Purbanchal Bank was not brought on record. Suffice it to say, that the age
of superannuation in the Purbanchal Bank was also 58 years. Respondent No.
I, who had meanwhile been confinned in the Gauhati Bank, had been promoted
on l.7.1975 as an officer in that Bank. On amalgamation, respondent No. l
thus became an officer of the Purbanchal Bank with effect from l.8.1975, the B
age of superannuation being 58 years.

2. On 29.8.1990, the Purbanchal Bank merged with the appellant Bank
under a Scheme of Amalgamation under the Banking Regulation Act, 1949.
The Appellant Bank was to frame Regulations with a view to bring the
employees of Purbanchal Bank on a par with those of the Appellant Bank. C
On 6.5.1991, the appellant Bank, in tenns of clause 11 of the Scheme of
Amalgamation, fixed the pay and other service conditions of officers and
employees of the erstwhile Purbanchal Bank and made the Central Bank of
India Service Regulations 1991 applicable to them with effect from l.4.1991.
Respondent No. I, whose date of birth had been recorded as 1.8.1934, was
to attain the age of 58 years by 31.7.1992. On 17.7.1992, the appellant Bank D
infonned respondent No. I that he would be reaching the age of superannuation
on 1.8.1992. Respondent No. I by his reply dated 23.7.1992, soughtt:> dispute
his date of birth. That apart, he also claimed that he would retire not on
attaining the age of 58 years but only on the attaining the age of 60 years,
as per Regulation 19 of the Service Regulations 1979 on the basis that his E
original appointment in the Gauhati Bank was on 9.6.1969 and hence he was
entitled to continue in service of the appellant Bank, till he attained the age
of 60 years. The appellant Bank did not accept this stand of respondent No.
I and retired him on his attaining the age of 58 years.

3. Respondent No. I approached the High Court challenging his being F
retired on attaining the age of 58 years and, of course, also raising an issue
about his date of birth. The learned single judge held that there was no merit
in the challenge to the date of birth recorded in the records of the B~1nk. He
further held that respondent No. I was entitled to continue in service only
till he attained the age of 58 years in the face of the Regulations. The :earned
single judge, hence, dismissed the Writ Petition. Respondent No. I filed an G
. appeal. The Division Bench of the High Court held that even though 1he age
of superannuation in the entry Bank, the Gauhati Bank, was 58 yeHs and
continued to be so until its amalgamation with the Purbanchal Bank and the
age o~retirement in the Purbanchal Bank was also 58 years, since Respondent
No. I must be deemed to be an employee of the Central Bank right from the H
280 SUPREME COURT REPORTS [2007) 9 S.C.R.

A inception, he was entitled to continue in service until· he attained the age of
60 years. It was reasoned that respondent No. I must be taken to be an officer
recruited in the appellant Bank prior to 19.7.1969 but promoted as an officer
on or after 19.7.1969 in terms of the Regulations of the appellant Bank and
entitled to continue till he attained the age of 60 years. Thus, setting aside
B the decision of the learned Single Judge, the Division Bench of the High
Court allowed the Writ Petition and taking note of the fact that respondent
No. I had attained the age of 60 years as on the date of the judgment, directed
the appellant Bank to pay within the time fixed by that court, all the arrears
of salary and other allowances as admissible to respondent No. t, if he were
allowed to continue in servic~up to the age of 60 years.
c 4. Feeling aggrieved by this decision, the appellant Bank along with its
officers has filed this appeal. The Union of India has been impleaded as
Respondent No. 2.

5. Regulation 19 of the Central Bank of India (Officers) Service
D Regu latj,ons, 1979 to the extent it is relevant reads:
"(I) Rules for age of retirement -

The age of retirement of an officer in the Bank on or after the appointed
date be determined as under-
E I. I. An officer employee of the Bank recruited/promoted prior to 19th
July, 1969 shall retire on completion of 60 years of age.
12. An officer employee of the Bank recruited prior to 19th July, 1969
but promoted as an officer on or after 19th July, 1969 shall retire
on completion of 60 years of age.
F )...

13. An officer employee of the Bank recruited whether as an Award
Staff or as an officer employee on or after 19th July, 19.69 shall
retire on completion of 58 years of age ... "

Whereas the case of the appellant Bank is that clause 1.3 of Regulation
G 19 is attracted since respondent No. I became an emp~oyee of the Bank only
after 19.7.1969 and must be taken to be an employee rectllited after 19.7.1969,
the claim of respondent No. I is that, since he was recruited to the Gauhati
Bank prior to 19.7.1969 and promoted as an officer after l~.7.1969 in the ..,,.
Gauhati Bank, he must be taken to have been recruited to the appellant Bank
prior to 19. 7.1969 and was entitled to continue in service till he attained the
H age of 60 years in terms of clause 1.2 of the Regulation. While the learned
...
CENTRAL BANK OF INDIA 1•. MADAN CHANDRA BRAHMA [BALASUBRAMANYAN,J.] 281

single judge held that clause l .3 would apply, the Division Bench has taken A
the view that clause 1.2 of the Regulation l 9 would apply.

6. On a plain understanding of the factual situation, it appears to us that
respondent No. I could be taken to have become an officer of the appellant
Bank only on the amalgamation of the Purbanchal Bank with the appellant
Bank. Admittedly, that was on 29.8. l 990, well after l 9. 7. 1969. Strictly speaking, B
respondent No. l was not recruited in the appellant Bank, if we literally
construe the expression 'recruited' occurring in the Regulation. Bui: obviously
the expression includes those who have become officers of the appellant
Bank by way of amalgamation or merger. Here, the merger took place only on
29 .8. l 990, long after l 9. 7.1969. In this situation, it is clear that resp·Jndent No. C
l could be deemed to have been recruited to the service of the appdlant Bank
only after 19.7.1969. If so, it would be clause 1.3 of Regulation l 9 that would
apply and not clause 1.2 of that Regulation. We may also notice that there
is nothing inequitable or unjust in the result thus reached, since the age of
superannuation insofar as respondent No. I and those similarly situated were
concerned, was 58 years both in Gauhati Bank, the entry Bank and the D
Purbanchal Bank with which the Gauhati Bank merged on 1.8.1975.

7. Chairman, Canara Bank, Bangalore v. M.S. Jasra & Ors., [1992] 2
SCR 68 relied on was a case where an employee of Lakshmi Commercial Bank,
which came to be amalgamated with Canara Bank, claimed that he was entitled
to continue in service of the Canara Bank until he attained the age of 60 years, E
since that was the age of superannuation in the Lakshmi Commercial Bank of
which he was the employee, prior to its amalgamation. His claim was rejected
by the Canara Bank and he challenged that decision in a writ petition in the
High Court. The High Court allowed the Writ Petition and held that the
employee was entitled to continue until he attained the age of 60 years. It was F
contended on behalf of the Canara Bank that on the basis of Section 45 of
the Banking Regulation Act, 1949 and the consequent amalgamation of Lakshmi
Commercial Bank with Canara Bank, the service conditions under Lakshmi
Commercial Bank would not be available to the employee; and that the terms
and conditions of service applicable to employees of corresponding rank and
status in Canara Bank would only apply. This Court upheld the contention G
of the Canara Bank and held that the employee became an employee of Canara
0-ank and was, therefore, entitled only to the right given by proviso (ii) to
clause (i) of sub-section (5) of Section 45 of the Banking Regulation Act, 1949
which entitled him to the same terms and conditions of service as employees
of the corresponding rank or status in Canara Bank. Age of superannuation H
282 SUPREME COURT REPORTS [2007] 9 S.C.R.

A of the employees in Canara Bank being 58 years only, the employee could not
claim to retire at the age of 60 years. In the case on hand, the age of
superannuation both in the Gauhati Bank and the Purbanchal Bank, which
subsequently got amalgamated with the appellant Bank, was only 58 years.
The notification sanctioning the amalgamation under Section 45(7) of the
B Banking Regulation Act is dated 29.8.1990. Clause I 0 provides that employees
like the respondent are deemed to have been appointed by the appellant Bank
on the same tenns and conditions of service as were applicable to them before
the close of business on 14.7.1990. They were to be granted the same pay ·"'
as employees of the appellant Bank, were to hold office on the same tenns
and conditions of service that are applicable to the employees of the appellant
C Bank. The communication from the central office dated 6.5.1991 relating to pay
and other 'conditions of service of such officers, by paragraph 6, has
elaborately provided for the reckoning of their prior services in the Purbanchal
Bank on matters specified herein. It does not contemplate the treating of the
employee as having joined the appellant Bank on the day the employee joined
the Purbanctial Bank. Thus, the scheme adopted, worked and accepted by all,
D does not provide for treating such an employee as having entered the service
of the appellant Bank even prior to the amalgamation, except for the purposes
specified. If at all, the Pay and other ser\rice conditions of officers of the
erstwhile Purbanchal Bank Limited dated 6.5.91 gives an indication, it is that
the original date of appointment has relevance only for purposes such as
E provident fund, gratuity, for sanction of loans, etc. It has to be noticed that
in the matter of placement in the appellant bank, the service of one and a half
years in the Purbanchal Bank has to be treated as service for one year only
in the appellant bank. That resolution heavily relied on by the Division Bench
of the High Court only provides that officers like Respondent No. I would be
governed by the Central Bank of India (Officers) Service Regulations, 1979
F with effect from 1.4.1999. The fact that the regulation had been made applicable,
would not mean that such officers must be taken to have been recruited from
the date of their entry in the Purbanchal Bank. Th~ applicability of the
Regulations with effect from 1.4.1991 is subject to exceptions provided
thereunder. It is in that context that the non-reckoning of service for one year
G in Purbanchal Bank as equivalent to servi~e of one year in the appellant bank
assumes significance. In this situation, while applying Regulation 19, it is not
possible to uphold the plea that the respondent should be taken to have been
recruited to the appellant bank prior to 19.7.1969 so as to attract paragraph
1.2 thereof. The right to be treated on a par with the employees of the
appellant Bank is one thing, but the right to insist that the employee must
H be deemed to have become an employee of the appellant Bank even before
CENTRAL BANK OF INDIA 1•. MADAN CHANDRA BRAHMA [BALASUBRAMANYAN,J.) 283
the amalgamation is another. It may be noted that clause (i) of sub-section A
(5) of Section 45 of the Banking Regulation Act, 1949 has only provided that
an employee, such as the respondent, had the right to get the same remuneration
and to have the same terms and conditions of service which they were getting
or by which they were being governed immediately before the date of the
order of moratorium. The right to be treated on a par with the employees of B
the appellant Bank cannot extend to a right to be treated as having entered
the service of the appellant Bank even before the very amalgamation. The
decision referred to above also shows that it is the age of superannuation in
the transferee Bank that would govern and the age of superannuation in the
transferee Bank subsequent to 19.7.1969, is only 58 years.

8. As we have noticed earlier, the age of superannuation, when
c
respondent No. I joined service in the Gauhati Bank was 58 years and when
that Bank merged with the Purbanchal Bank, it continued to be 58 years. As
far as we can see, there is nothing in the Regulations or the Resolution which
would enable respondent No. I to claim that he was entitled to continue until
the age of 60 years when the age of superannuation of even an officer D
originally recruited to the appellant Bank after 19. 7.1969 was only 58 years.
Even though, respondent No. I may carry his date of appointment in Gauhati
Bank for the purpose of service benefits to the extent specified, the same does
not extend to supporting a claim that he must be deemed to have been
recruited in the Central Bank prior to 19.7.1969. We are, therefore, of the view E
that the High Court was in error in holding that respondent No. l was entitled
to continue in service in the appellant Bank till he attained the age of 60 years
and was entitled to monetary benefits on that basis. On a plain reading of
Regulation 19 in the context of the materials available, we are satisfied that
respondent No. I was bound to retire on attaining the age of 58 years. The
learned single judge· was, therefore, justified in dismissing the Writ Petition. F
The Division Bench was not justified in allowing it.

9. We may notice here th~t in B.S. Yadav and Anr. v. Chief Manager,
Central Bank of1ndia and Ors., [1987] 3 SCC 120 this Court upheld the rule
providing for different retirement ages for the employees recruited by the
Central Bank before its nationalization and for those recruited to the Bank G
after its nationalization. The age of superannuation of the former was 60 years
and of the latter only 58 years. When this is the position and the date of
retirement is 58 years after nationalization of the bank we find no reason to
hold that those who came to the bank after nationalization by way of
amalgamation should stand on a better footing than the employees recruited H
284 SUPREME COURT REPORTS [2007] 9 S.C.R.

A to the Central Bank itself after nationalization.

10. Having held on law that the respondent is not entitled to the relief
claimed by him, we feel that some compensation should be directed to be paid
to him, in the circumstances, in exercise of our jurisdiction under Article 142
of the Constitution of India. The respondent, we notice, was fighting on a ·
B question of interpretation of the Regulation of the appellant bank and has
remained in court for a considerable time. Taking note of the divergence in
the views of the High Court, our conclusion d'nd the circumstances of the
case, we feel that it would be appropriate to direct the appellant to pay a sum
of Rs.I lakh to the respondent ex gratia. We clarify th~t the direction is not
C intended to be a precedent in any manner.

11. We, therefore, allow this appeal and setting aside the decision of the
High Court dismiss the Writ Petition filed by respondent No. 1 in the High
Court. We direct the appellant to pay a sum of Rs. I lakh to Respondent No.I
ex gratia within three months from today. In the circumstances, we direct the
D parties to suffer their costs here and in the High Court.

D.G. Appeal allowed.

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