JUDGMENT

VENKATACHALIAH, J.:— This Writ Petition under Article 32 of the Constitution of India raises the question of the validity of Regulation 7 read with Schedule I of State Bank of Patiala. (Officer) Service Regulations, 1979 ("Regulations" for short) pertaining to the placement and fitment of existing officers 32 in the service of the State Bank of Patiala in the new grades and scales of pay.

2. In the year 1959, all "State Banks"- State Bank of Patiala was one of them - were made subsidiaries of the State Bank of India under the State Bank of India (Subsidiary Banks) Act 1959. Section 63 of this Act provided:

"63. Power of the State Bank to make regulations :-

(1) The State Bank may, with the approval of the Reserve Bank, make in respect of a subsidiary bank regulations, not inconsistent with this Act and the rules made thereunder, to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, and regulations may provide for

(a) to (1) ... .... Omitted as unnecessary

(m) the conditions and limitations, subject to which the subsidiary bank may appoint officers, advisers and other employees and fix their remuneration and other terms and conditions of service;

(n) to (y) ... ... Omitted as not necessary

Pursuant to and in exercise of the powers of Section 63 State Bank of Patiala (Officers) Service Regulations, 1979 were promulgated. On the pattern of the recommendations made in regard to the Rationalisation and Standardisation of pay-scales of nationalised banks made by what is known as the "Pillai Committee" the pay scales in State Bank of Patiala were also revised and restructured introducing new grades and scales. The regulations were to take effect from 1st October, 1979. Regulation 7 read with Schedule I provided the placement and fitment of the exiting officers of the bank in the new grades and scales of pay. In the present case we are concerned with the placement and fitment of existing officers "Grade A" to which both the petitioners Sri Tarsem Lal Gautam and Sri C. V. Madan belong.

3. The "Regulations" were promulgated, in exercise of the powers conferred by the State Bank of India (Subsidiary Banks) Act, 1959, by the Central Board of Directors of the State Bank of India in consultation with the Board of Directors of State Bank of Patiala and with the previous approval of the Reserve Bank of India. Regulation 4(1) introduced the following new grades and scales of pay for the officers in the Bank :

"4(1) There shall be the following four grades for officers with the scales of pay specified against each of the grades:-

(A) Top Executive Grade Scale VII - Rs. 3000-125-3500

Scale VI - Rs. 2750-125-3250

(B) Senior Management Grade Scale V - Rs. 2500-100-2700

Scale IV - Rs. 2000-100-2400

(C) Middle Management Grade Scale III - Rs. 1800-75-2250

Scale II - Rs. 1200-70-1550-75-2000

(D) Junior Management Grade Scale I - Rs. 700-40-900-50-1100-EB-1200-60-1800

The petitioners were "existing officers" as on the appointed date i.e. on 1-10-1979 in Grade A. Existing Officers in Grade A were placed in the corresponding new grades and scales of pay. The officers in the earlier existing Grade A in the pay-scale of Rs. 1200- 60-50-75-950 were placed in two different cadres and scale of pay, viz., "Senior Management Grade Scale IV" with the pay- scale of Rs. 2000-100-2400, and "Middle management Grade Scale III" with the pay-scale of Rs. 1800-75-2250, on the sole basis whether the officers had been promoted to the existing Grade A on or prior to 31-12-1975 or thereafter. The effect of Regulation 7 read with Schedule I was that all existing Grade A officers who had been promoted to that grade prior to 31-12-1975 were placed in the new scale ("Senior Management Grade Scale IV" : Rs. 2000-100-2400) and those existing Grade A Officers who are promoted as such after 31-12-1975 were placed in the