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2024 Supreme(Online)(KAR) 37825
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
NC: 2024:KHC:46664
WP No. 20815 of 2014
BETWEEN:
SRI. H. SHIVA RAO
AGED ABOUT 61 YEARS,
NO.1080, 42ND CROSS,
KUMARASWAMY LAYOUT, 1ST STAGE,
BANGALORE-560 078,
RETIRED AS BRANCH HEAD IN
THIRD RESPONDENT COMPANY.
…PETITIONER
AND:
1. RESERVE BANK OF INDIA
CENTRAL OFFICE,
HUMAN RESOURCE MANAGEMENT DEPARTMENT,
SHAHID BHAGAT SINGH MARG,
MUMBAI-400 001,
REPRESENTED BY
THE CHIEF GENERAL MANAGER.
2. STATE BANK OF INDIA
CORPORATE CENTRE,
ASSOCIATE BANKS DEPARTMENT,
NARIMAN POINT,
MUMBAI-400 021,
REPRESENTED BY
THE CHIEF GENERAL MANAGER.
3. SBI DFHI LTD.,
REGISTERED AND HEAD OFFICE,
VOLTAS HOUSE, 3RD FLOOR,
23, J.N.HEREDIA MARG,
BALLARD ESTATE,
MUMBAI-400 001,
REPRESENTED BY
THE MANAGING DIRECTOR AND CEO.
4. MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
SBI DFHI LTD.,
VOLTAS HOUSE, 3RD FLOOR,
23, J.N.HEREDIA MARG,
BALLARD ESTATE,
MUMBAI-400 001.
…RESPONDENTS
(BY SRI. SUBRAMANYA P.D., ADVOCATE)
(BY SMT. TANMAYEE RAJKUMAR, ADVOCATE FOR RESPONDENT NO.1;
SMT. SUVARNA M.N., ADVOCATE FOR SRI. PUTTEGOWDA K., ADVOCATE FOR RESPONDENT NOS.2 TO 4)
CORAM HON'BLE MR. JUSTICE R. NATARAJ
DATED THIS THE 24TH DAY OF OCTOBER, 2024
The court ruled that the petitioner is entitled to differential pay aligned with RBI scales but not to extend service until 60 years of age, as per DFHI rules.
Headnote:(A) Companies Act, 1956 - Section 619B - Employment Law - The petitioner sought to quash multiple orders regarding pay scales and retirement age after absorption into DFHI from RBI - The court found that the petitioner was entitled to differential pay aligned with RBI scales but not to extend service until 60 years of age. (Paras 1, 15, 23)
(B) Employment Rights - The court emphasized that once the petitioner opted for absorption, he forfeited rights under RBI service rules, and the revised pay scales of DFHI were applicable. (Paras 16, 24)
(C) Superannuation - The court upheld the retirement age of 58 years as per DFHI rules, rejecting claims for extension based on RBI norms. (Paras 23, 24)
Facts of the case:
The petitioner, absorbed into DFHI after voluntary retirement from RBI, contested the denial of pay scale revisions and retirement age extension. He argued that his pay should align with RBI standards due to the terms of his absorption.
Findings of Court:
The court directed DFHI to pay the petitioner differential pay aligned with RBI scales and re-determine his pension, while rejecting the claim for extended service.
Issues: The main issues were the applicability of RBI pay scales post-absorption and the legality of the retirement age set by DFHI.
Ratio Decidendi: The court ruled that the petitioner’s absorption into DFHI was irrevocable, and he was bound by DFHI’s service rules, including the retirement age of 58 years.
Result: The writ petition is allowed in part.
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE COMMUNICATION/ORDER MADE IN ADMN/NO.2010-11/282 DATED 12.07.2010 PASSED BY THE FOURTH RESPONDENT HEREIN (ANNEXURE-V) BEING ARBITRARY, ERRONEOUS AND NOT SUSTAINABLE IN LAW AND ETC.
THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 01.08.2024 AND COMING ON FOR PRONOUNCEMENT OF ORDER THROUGH VIDEO CONFERENCE THIS DAY, THE COURT MADE THE FOLLOWING:-
CAV ORDER
The petitioner has sought the following reliefs:
(i) Issue a writ of certiorari or any other writ or order or direction, quashing the Communication/Order made in Admn/No.2010-11/282 dtd: 12.07.2010 passed by the fourth respondent herein (Annexure-V) being arbitrary, erroneous and not sustainable in law.
(ii) Issue a writ of certiorari or any other writ or order or direction, quashing the Communication/Order made in Admn/No.2010-11/349 dtd: 05.08.2010 passed by the third respondent herein (Annexure-X) being arbitrary, erroneous and not sustainable in law.
(iii) Issue a writ of certiorari or any other writ or order or direction, quashing the Communication/Order made in Admn/No.2011-12/220 dtd: 16.07.2011 passed by the fourth respondent herein (Annexure-Z_1) being arbitrary, erroneous and not sustainable in law.
(iv) Issue a writ of certiorari or any other writ or order or direction, quashing the Communication/Order made in No.Admn/No.2011-12/603 dtd: 30.01.2012 passed by the third respondent herein (Annexure-Z_3) being arbitrary, erroneous and not sustainable in law.
(v) Issue a writ of certiorari or any other writ or order or direction, quashing the Communication/Order made in No.Admn/No.2013-14/GV/455 dtd: 09.12.2013 passed by the third respondent herein (Annexure-Z_10) being arbitrary, erroneous and not sustainable in law.
(vi) Direct the third respondent company herein to pay differential amount of pay and allowances granting pay scales and allowances "in line" with that obtaining in the first respondent the RBI during the tenure of service of the petitioner herein in the third respondent herein in terms of the Second paragraph of the letter of offer dtd: 08.05.1995 with interest and payment of compensation equal to salary for loss of service due to premature retirement of the petitioner from service being discriminatory, erroneous and opposed to law, equity and justice alternatively Direct the first and second respondents herein to pay differential amount of pay and allowances granting pay scales and allowances "in line" with that obtaining in the first respondent the RBI during the tenure of service of the petitioner herein in the third respondent company herein as per the Second paragraph of the letter of offer dtd: 08.05.1995 with interest and payment of compensation equal to salary for loss of service due to premature retirement of the petitioner from service and recover from third respondent herein in the interest of justice and equity.”
2. The petitioner contends that he was appointed on 14.03.1973 by the respondent No.1 in the cadre of Clerk GradeII/C.N Ex. Grade II. His appointment was confirmed on 01.01.1977. He was thereafter granted promotion to higher grades. From 07.08.1997, he was promoted as a Staff Officer, a Grade 'A' post and was transferred from Mumbai to Bengaluru.
2.1 The petitioner claimed that the respondent No.1 had established a new entity called the Discount and Finance House of India Limited (henceforth referred to as 'DFHI' in short) on 08.03.1988. The majority of its shares was held by the respondent No.1 and other Public Sector Banks while the remaining shares were held by all India financial institutions. DFHI was recognized as a subsidiary of RBI and a deemed Government Company under Section 619B of the Companies Act, 1956. The Chairman of the Board of Directors of DFHI used to be a Deputy Governor of RBI who invariably was a member of the Central Board of Directors of RBI. The objective of DFHI inter alia was to develop a market
