IMPORTANT POINT
The employees of the Regional Rural Banks are entitled to claim parity with the employees of their sponsor banks, and therefore employees of Regional Rural Bank Sponsored by State Co-operative Bank cannot claim equal pay on par with employees of Regional Rural Banks Sponsored by Nationalised and Commercial Banks.

Headnote:Regional Rural Banks Act, 1976 -Section 17-Employees of Regional Kisan Bank Sponsored by U.P. Co-operative Bank-Claim by employees for equal pay on par with employees of Regional Banks Sponsored by Nationalised and other Commercial Banks-Central Government appointing equation committee which equated employees with comparable to Sponsoring Bank-Employees entitled to pay equal to comparable to employees of Sponsoring Bank and not equal pay on par with employees of other Regional Banks Sponsored by Nationalised and Commercial Banks-Article 14 of Constitution not violated.
It is too well settled that even a single institution can form a class by itself and while deciding the question of violation of Article 14 what is required to be found out is whether there are any reasonable basis on which a single person or group of persons are left out of the group and whether there is any rational relation for such differentiation with the object sought to be achieved. In other words, what is necessary is that there must be a nexus between the basis of classification and the object of such classification. This being the test and the test being applied to the case in hand in the light of the provisions of the Regional Rural Banks Act, 1976, it is the sponsor bank, which plays a vital role in the establishment of the rural banks by Government of India and when the Union Government is called upon to determine the remuneration of the officers and employees, appointed by the Regional Rural Banks, the statutory requirements that the Central Government shall have due regard to the salary structure of the employees of the State Government and the local authorities of comparable level and status in the notified area. This being the position and the tribunal having specifically held that the employees of the Regional Rural Banks are entitled to claim parity with the employees of their sponsor banks, the ultimate decision of the Equation Committee on the basis of such party, cannot be held to be discriminatory nor can it be held to be violative of Article 14. The High Court, in our opinion, therefore, committed serious error on the basis that the employees of all the Regional Rural Banks are entitled to the same parity, irrespective of the pay structure of the employees of their respective sponsor banks. The concept of equal pay for equal work and the concept of claim of parity with some others are two different concepts and the conclusion of the High Court having been based on a mis-reading of the findings of the Tribunal, the said conclusion is vitiated and must be set aside. The conclusion of the High Court that the Equation Committee erroneously equated the Branch Managers of the Appellant Bank with the Assistant Managers of other Banks is also a conclusion not based upon any rational basis and the High Court was fully in error in applying the pay structure of the Regional Rural Banks sponsored by the Nationalised Bank to the pay structure of the Appellant Bank which was sponsored by U.P. Co-operative Bank. The Equation Committee consisting of specialised personnel having examined the relevant datas and having made the equation with their expertise the same could not have been interfered with by the High Court, particularly when neither there has been any allegation of malice or extraneous consideration nor any materials on that score were there before the Court. (Paras 6 and 7)

JUDGMENT

Pattanaik, J.-The appellant is a Regional Rural Bank, established under Section 3 of the Regional Rural Banks Act, 1976 and is sponsored by the Uttar Pradesh Co-operative Bank Limited, Lucknow, which is a society registered under the U.P. Co-operative Societies Act. There are 196 Regional Rural Banks in the country but out of them 195 banks are sponsored by the nationalised banks and it is only the appellant bank, which is sponsored by the U.P. Co-operative Bank. Under Section 3 of the Regional Rural Banks Act, 1976, it is the Central Government, who by Notification in the official Gazette, establishes one or more Regional Rural Banks, only on being requested by a sponsor bank to establish the same. Under sub-section (3) of Section 3 of the said Act it is the duty of the Sponsor Bank to aid and assist the Regional Rural Bank sponsored by it by subscribing to the share capital, training personnel of such Regional Rural Bank and providing such managerial and financial assistance to such Regional Rural Bank during the first five years of its functioning as may be mutually agreed upon between the Sponsor Bank and the Regional Rural Bank. Under sub-section (2) of Section 6, of the capital issued by a Regional Rural Bank fifty per cent shall be subscribed by the Central Government, fifteen percent by the concerned State Government and thirty five per cent by the Sponsor Bank. Under Section 17, the Regional Rural Bank is empowered to appoint such number of officers and other employees as it may consider necessary and may determine the terms and conditions of their appointment and service. Under Second proviso to aforesaid Section 17 remuneration of officers and other employees appointed by Regional Rural Bank will be such as may be determined by the Central Government and in determining such remuneration the Central Government shall have due regard to the salary structure of the employees of the State Government and the local authorities of comparable level and status in the notified area. The employees of the Regional Rural Banks filed Writ Petitions in this Court under Article 32, being Writ Petition Nos. 7149-50 of 1982 and 132 of 1984 seeking parity in respect of pay, salary, allowances and other benefits with the employees of Nationalised Banks in corresponding or comparable posts. This Court by order dated 1.9.1987 disposed of those Writ Petitions as the Central Government agreed to appoint a National Industrial Tribunal to decide the question relating to pay, salary, allowances and other benefits payable to the employees of the Regional Rural Banks constituted under the Regional Rural Banks Act, 1976. Pursuance to the aforesaid order the Government of India by Notification dated 26th November, 1987 referred the disputes raised in Writ Petition Nos. 7149-50 of 1982 and 132 of 1984 to the Industrial Tribunal consisting of a Retired Chief Justice of Andhra Pradesh High Court Justice Obul Reddy. The said Tribunal elaborately considered the materials placed before it and gave its Award on 30th April, 1988. The said Tribunal by its Award came to hold that so far as the equation of posts and consequent fixation of new scale of pay, allowances and other benefits for officers and other employees of the Regional Rural Banks at par with the officers and other employees of comparable level in the corresponding posts in the Sponsor Banks and their fitment into new scale of pay, as are applicable to officers of Sponsor Bank in corresponding posts of comparable level, it is a matter which has to be decided by the Central Government in consultation with such authorities as it may consider necessary. In view of the aforesaid observations of the Tribunal the government of India constituted a Committee, called the Equation Committee and referred the Award to the Committee seeking for a report in the matter of Equation. On the basis of the recommendation of the Equation Committee dated 22nd February, 1991, the Union Government in

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2000 Supreme(SC) 1826

Cases Referred (1)