JUDGMENT

KANIA, J.

( 1 ) SPECIAL leave granted. Counsel heard.

( 2 ) THIS is an appeal filed by the Reserve Bank of India, by special leave. The contesting respondent, being respondent No. 1 is an association of its officers at its Gauhati unit. The respondent association (referred to hereinafter as "the respondent") represents the interests of 45 officers belonging to Grades A to C employed in the appellant bank at its unit at Gauhati. It appears from the affidavit filed on behalf of the appellant that there was difficulty in persuading officers of the appellant posted outside the North-Eastern region to accept transfers to the unit of the appellant in the North-Eastern part of the country which unit was Located at Gauhati in Assam. It also emerges from the record that the Gauliati station was regarded as a hardship station by the officers who were transferred to the Gauhati unit from other regions of the country. The Government of India found a similar difficulty in persuading its officers to accept postings in the North-Eastern region and they were given substantial incentives to accept transfers to the North-Eastern region. We are not here concerned directly with the actual benefits granted by the Government of India but what is material is that such benefits had to be given by the Government of India. By a letter dated 9/12/1983, certain incentives and allowances were provided by the appellant to its officers posted at Gauhati who were not from the North-Eastern regions. Those allowances were generally known as special duty allowances. We are not much concerned with the details as to how the special duty allowances were calculated but the main special duty allowance basically comprised 25 Per Cent of basic pay, subject to a maximum of Rs. 400. 00 per month. These allowances were also known as special compensatory allowances or remote locality allowances. By a Memorandum issued by the appellant on 11/04/1985, an ad hoc increase in salary was effected for non-local officers and an option was given to them either to choose the ad hoc increase or the special duty allowances for the period during which they were posted at Gauhati. The respondent demanded the extension of the said benefit to the local officers by its letter dated 10/05/1985. We may mention here that the local officers who were posted at Gauhati did get an extra allowance in addition to their salaries but it was considerably smaller than the main compensatory allowance paid to the officers from outside the North-Eastern region who were transferred to Gauhati. Certain other benefits were also allowed to non-local officers transferred to Gauhati but there is no need to refer to them in detail. The appellant declined to allow the same allowances to local officers posted at Gauhati as were given to the officers from other regions transferred to Gauhati as stated earlier. It is this decision which gave rise to the writ petition from the decision in which this appeal arises.

( 3 ) IT was the contention of the respondent before the Gauhati High Court that all the officers of the appellant bank posted at Gauhati, whether they were from the North Eastern region or outside had to live in the same conditions and suffer from the same hardships, and hence, if any allowance was given to the officers transferred from outside to the Gauhati office, the very same allowance should also be given to the local officers posted at Gauhati. In the counter filed in the High Court by the appellant bank, the Deputy Chief Officer of the appellant bank averred that the hardships faced by the nonlocal officers are greater than those faced by the local officers. The scheme of ad hoc incentives was introduced to tide over the problem of adequately staffing the Gauhati office. Non-local officers experienced difficulties in getting accommodation, getting familiar with the language and so on, and some incentives had to be given to them to mitigate the hardships experienced by them on transfer to G