- Bookmark
- Share
- CaseIQ
State Bank Of India v. D. Hanumantha Rao And Another
Factual and Procedural Background
Respondent 1, D. Hanumantha Rao, was a Short Service Commissioned Officer (SSCO) in the Indian Army before joining the State Bank of India (SBI) as a Probationary Officer on 1 July 1972 under a reserved quota for ex-servicemen. Rule 19(1) of the SBI Officers' Service Rules mandates retirement at 58 years of age but contains a first proviso permitting discretionary extension “in the interest of the Bank” and a second proviso barring such extension to officers who joined the Bank on or after 19 July 1969.
The respondent asserted that, by virtue of Rule 6 of the Emergency Commissioned Officers & Short Service Commissioned Officers (Reservation of Vacancies) Rules, 1971 and a memorandum dated 21 September 1993, his prior army service was notionally counted from 26 October 1965 for seniority, pay and pension. He therefore contended that his “date of entry” into SBI should be taken as 26 October 1965, exempting him from the second proviso and entitling him to consideration for extension of service under the first proviso.
A learned Single Judge of the Andhra Pradesh High Court accepted this position and directed SBI to consider the respondent’s case for extension. A Division Bench dismissed SBI’s letters patent appeal. SBI thereafter sought and obtained special leave to appeal to the Supreme Court, resulting in the present decision.
Legal Issues Presented
- Whether the respondent, who actually joined SBI on 1 July 1972 but received notional seniority from 26 October 1965, is eligible for extension of service beyond 58 years under the first proviso to Rule 19(1) of the SBI Officers' Service Rules despite the bar contained in the second proviso.
Arguments of the Parties
Respondent’s Arguments
- Because his army service was counted for seniority, pay and pension with effect from 26 October 1965, that date should be treated as his date of entry into SBI.
- Consequently, the second proviso to Rule 19(1)—which prohibits extension for officers who joined on or after 19 July 1969—does not apply, and he is entitled to be considered for extension under the first proviso.
Appellant (State Bank of India) Arguments
- The notional or “legal fiction” of back-dated seniority created solely for seniority, pay and pension cannot be extended to other service conditions, including retirement age or extension of service.
- Government of India letter dated 9 September 1996 clarifies that the retirement age for ex-ECOs/SSCOs re-appointed after 19 July 1969 remains 58 years regardless of notional seniority.
- Relied on Kerala High Court decision in Dy. G.M., State Bank of India v. P. Ramadas (WP No. 568 of 1997), which held that Rule 6 benefits cannot be used to claim extension of service under Rule 19(1).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Dy. G.M., State Bank of India v. P. Ramadas WP No. 568 of 1997 (Kerala HC) |
Notional seniority granted under Rule 6 of the 1971 Rules cannot be relied on to seek extension of service under Rule 19(1) of the SBI Officers' Service Rules. | The Supreme Court agreed with and adopted the Kerala High Court’s reasoning, using it to overturn the Andhra Pradesh High Court’s contrary view. |
Court's Reasoning and Analysis
The Supreme Court emphasized the settled principle that a legal fiction is confined to the purpose for which it is created. Rule 6 of the 1971 Rules and the 1993 memorandum created a fiction only for seniority, pay and pension. Extending that fiction to alter other service conditions—such as eligibility for service extension—would exceed its intended scope.
The Court found the Government of India’s letter dated 9 September 1996 decisive: it expressly states that ex-ECOs/SSCOs who actually joined public-sector banks after 19 July 1969 must retire at 58 years, regardless of notional seniority. Thus, the respondent’s actual joining date (1 July 1972) governs, bringing him squarely within the bar in the second proviso to Rule 19(1).
Consequently, the High Court erred in treating 26 October 1965 as the respondent’s date of entry for purposes beyond those explicitly authorised. Aligning with the Kerala High Court’s decision in P. Ramadas, the Supreme Court held that the respondent is not entitled to consideration for extension of service.
Holding and Implications
APPEAL ALLOWED; High Court judgments set aside; respondent’s writ petition dismissed.
Immediate Effect: The respondent is not entitled to any extension of service beyond the age of 58 years, and SBI is under no obligation to consider such extension.
Broader Implications: The decision confirms that notional benefits conferred on ex-servicemen for seniority, pay and pension under Rule 6 of the 1971 Rules do not alter other service conditions, notably retirement age, thereby providing uniform guidance to public-sector banks dealing with similar claims.
1. Special leave granted.
2. The only question that falls for consideration in this appeal is whether Respondent 1, D. Hanumantha Rao (hereinafter referred to as “the respondent”), is entitled for extension of service after his attaining the age of 58 years under Rule 19(1) of the State Bank of India Officers' Service Rules (hereinafter referred to as “the Service Rules”) which provides as under:
“19. (1) An officer shall retire from the service of the Bank on attaining the age of fifty-eight years or upon the completion of thirty years' service or thirty years' pensionable service if he is a member of the Pension Fund, whichever occurs first:
Provided that the competent authority may, at its discretion, extend the period of service of an officer who has attained the age of fifty-eight years or has completed thirty years' service or thirty years' pensionable service as the case may be, should such extension be deemed desirable in the interest of the Bank, so however, that the service rendered by the officer concerned beyond 58 years of age except to the extent of the period of leave due at that time will not count for purpose of pension:
Provided further that an officer who had joined the service of the Bank either as an officer or otherwise on or after 19-7-1969 and attained the age of 58 years shall not be granted any further extension in service.”
3. The respondent was a Short Service Commissioned Officer (for short “SSCO”) in the army. After his release from the army, he was appointed as a Probationary Officer with the State Bank of India on 1-7-1972 against the reserved quota. Under Rule 19(1) of the Service Rules, an officer retires on attaining the age of 58 years or on completion of thirty years' service, whichever occurs first. Under the first proviso, the competent authority can extend the period of service of an officer, should such extension be deemed desirable in the interest of the Bank. Under the second proviso, such extension cannot be granted to an officer who joined the service of the Bank on or after 19-7-1969. The case of the respondent is that in view of Rule 6 of the Emergency Commissioned Officers & Short Service Commissioned Officers (Reservation of Vacancies) Rules, 1971 (hereinafter referred to as “the 1971 Rules”) which is applicable to the State Bank of India and in view of the memorandum dated 21-9-1993, after taking into account his army service, the respondent was given the benefit of seniority, pay and pension with effect from 26-10-1965 and since the said benefits have been extended to the respondent with effect from 26-10-1965, his date of entry in the service of the State Bank of India has to be treated as 26-10-1965 and that the second proviso to Rule 19(1) would not be applicable in his case and he would be entitled to be considered for grant of extension of service under the first proviso to Rule 19(1). The said contention of the respondent was accepted by the learned Single Judge of the Andhra Pradesh High Court and the writ petition filed by the respondent was allowed and the appellant was directed to consider the case of the respondent for extension of service in accordance with the first proviso to Rule 19(1) of the Service Rules. The letters patent appeal filed by the State Bank of India against the said judgment of the learned Single Judge has been dismissed by the Division Bench of the High Court by the impugned judgment.
4. Shri Gopal Subramaniam, the learned Senior Counsel appearing for the Bank, has submitted that the High Court was in error in proceeding on the basis that the date of entry of the respondent in service should be treated as 26-10-1965 and not 1-7-1972. The submission is that by legal fiction, the respondent was given the benefit of the earlier army service and for the purpose of seniority, pay and pension he was treated as if appointed in the service of the Bank with effect from 26-10-1965. The submission is that the said fiction could not be extended for any other purpose including extension of service for the purpose of retirement. Shri Subramaniam has placed reliance on the communication from the Government of India, Ministry of Finance, dated 9-9-1996 wherein it is stated:
“The undersigned is directed to refer to your Letter No. CDO/ABM/6915 dated 25-1-1996 on the above subject and to enclose a copy of this Division Letter No. 202/3/3/89-SCT(B) dated 8-6-1993 wherein it has been made clear that the date of retirement will be reckoned with reference to the terms and conditions of service as applicable at the time of actual entry in the service. Thus, in the case of ex-ECOs/SSCOs reappointed in the public sector banks after nationalisation of banks, i.e, 19-7-1969, the age of retirement would be 58 years even though they have received back-dated seniority which is only notional for the limited purpose of next promotion and pay fixation in terms of relevant government instructions. The fact that ex-ECOs/SSCOs are allowed to refund the amount of gratuity/pensionary benefits so as to count their service in the military service for the purpose of pension in the Bank will not affect the retirement age which will be decided only on the basis of their actual date of joining in the Bank.”
Shri Subramaniam has also placed before us the decision of the Kerala High Court dated 1-4-1997 in Dy. G.M, State Bank of India v. P. Ramadas WP No. 568 of 1997 wherein a view contrary to that taken by the Andhra Pradesh High Court in the impugned judgment has been taken and it has been held that the benefit granted under Rule 6 of the 1971 Rules cannot be extended for the purpose of extension of service under Rule 19(1) of the Service Rules.
5. We find considerable force in the said submissions of the learned counsel. Having regard to the fact that the benefit of earlier army service was extended for the limited purpose of seniority, pay and pension in view of Rule 6 of the 1971 Rules and memorandum dated 21-9-1993, we are of the view that the said benefit of earlier army service cannot be extended in respect of other service conditions including extension of service. It is settled law that a legal fiction has to be confined to the purpose for which it is created. Since the legal fiction under Rule 6 of the 1971 Rules has been created for the limited purpose of seniority, pay and pension, the said fiction could not be extended for other purposes. The intention of the Government of India in this regard has been made clear in the letter dated 9-9-1996 wherein it is stated that in the case of ex-ECOs/SSCOs reappointed in the public sector banks after nationalisation of banks, i.e, 19-7-1969, the age of retirement would be 58 years even though they have received back-dated seniority which is only notional for the purpose of next promotion and pay fixation in terms of relevant government instructions. We are, therefore, unable to uphold the judgment of the learned Single Judge as well as the impugned judgment of the Division Bench of the High Court. We are in agreement with the judgment of the Kerala High Court in Writ Appeal No. 568 of 1997 dated 1-4-1997 WP No. 568 of 1997 wherein the said High Court has taken a view contrary to that taken by the Andhra Pradesh High Court.
6. The appeal is, therefore, allowed, the judgment of the learned Single Judge and that of the Division Bench of the High Court are set aside and the writ petition filed by the respondent is dismissed. No order as to costs.
Alert