Mukund K. Pai & Ors. vs Punjab National Bank & Ors.

Court

Supreme Court of India

Date

30 July 2025

Case No.

Civil Appeal No. 9918 of 2025

Result

Allowed

Bench

J.K. Maheshwari

Citation

[2025] 7 S.C.R. 2148 : 2025 INSC 1033

Issue for consideration

Issue arose as regards to whether Indian Banks Association Clarification and HRMD Circular can override the 2014 guidelines for the purpose of pay fixation of ex-servicemen during re-employment; whether re-fixation as done by the respondent-Bank pursuant to the IBA Clarification is in consonance with the guidelines dated 17.02.2014 and whether the High Court was justified in confirming such re-fixation; and if not, in what manner can the fixation of pay of ex-servicemen may be made on their re-employment and what reliefs can be granted to the appellants-ex-servicemen.

Headnote

Service Law – Pay fixation – Pay fixation of ex-serviceman re-employed in public sector bank – Post-retirement from Indian Navy, the appellants took re-employment with the respondent-bank – Subsequent to issuance of IBA Clarification, the respondent-bank vide HRMD circular re-fixed the pay of the appellants at an amount lower than what they were re-employed at – Appellants filed writ petition – Single Judge of the High Court quashed the order of re-fixation – Division Bench set aside the order passed by the Single Judge – Challenge to:

Held: IBA Clarification and the subsequent HRMD Circular do not override the 2014 guidelines – Refixation done by the bank ignoring 2014 guidelines in applying IBA clarification and the HRMD circular to be quashed – Bank while re-fixing the pay had violated the principles of natural justice and reduced the pay of appellants without hearing them – IBA clarification and HRMD circular are not in consonance with the 2014 guidelines for pay fixation of ex-servicemen and for purpose of fixation of pay, the 2014 guidelines shall prevail over the IBA clarification and HRMD circular – Re-fixation applying IBA clarification and HRMD circular by ignoring the 2014 guidelines not justified – By virtue of passing order of re-fixation, the appellants have suffered civil consequences, thus, without affording an opportunity, re-fixation so done, was in violation of principle of natural justice hence, is set-aside – Bank to apply the 2014 guidelines and re-fix the pay of the appellants on the principles culled out – Recovery and refund, if any, shall stand quashed – Refixation be made afresh – While fixing the pay, in case, the pay of the appellants is reduced from initial fixation, the bank shall observe the principle of natural justice – Guidelines dated 17.02.2014 issued by Department of Financial Services (Welfare) – Indian Banks Association, letter dated 17.05.2018 – HRMD Circular No.413/2018 dated 22.06.2018. [Paras 24-26] Service Law – Pay fixation of ex-serviceman re-employed in public sector bank – Guidelines dated 17.02.2014 issued by Department of Financial Services (Welfare) – cl.2.1, 2.1(ii), 2.1(iii) – Essentials for re-fixation of the pay of an ex-serviceman on re-employment in the public sector bank – Stated. [Para 19]

Order 1) Leave granted. 2) The instant appeal has been preferred by the ex-servicemen, challenging the impugned order dated 07.02.20201, whereby the writ appeal was allowed and the order dated 11.04.2019,2 allowing the writ petition was set-aside. 3) The appellants after their retirement from Indian Navy, were reemployed with the respondent-bank as Single Window Operator-A (SWOA) in the Clerical Cadre. The discord between the parties arose when the respondent-Bank re-fixed the pay of the appellants at an amount lower than what they were re-employed at. This was challenged before the Single

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