SCPremadasa and othersI6 ■
V. Sabaragamuwa Development Bank and Others
PREMADASA AND OTHERSVSABARAGAMUWA DEVELOPMENT BANK AND OTHERSSUPREME COURTWIGNESWARAN, J.
DISSANAYAKE, J AND
RAJA FERNANDO, J
SC (FR) NO. 5085/2003
23,d AUGUST, 1st SEPTEMBER, 2004
Fundamental Rights – Fixation of salary on promotion – Invalidity of addingincrements for past service – Chapter VII of the Establishments Code – Deci-sion to recover increments invalidly given – Article 12(1) of the Constitution.
The four petitioners originally held supervisory grade III appointments in theRegional Rural Development Bank Sabaragamuwa. They were then appointedto the Sabaragamuwa Development Bank (1st respondent) as supervisorsGrade III; but they frunctional as “Executive Grade” employees.and were paid amonthly allowance of Rs. 3200/- in 2001 and 2002. They were thereafterrpomoted as officers Grade I from 01. 01. 2002.
The starting salary of Grade I in the new post was Rs. 11.310/- but the 1stpetitioner connived with the establishment to take into account the allowanceof Rs. 3200/- paid previously and on the basis of seven assumed incrementseach Rs. 265/- The 1st petitioner had himself and the 4th petitioner placedthemselves on a salary of Rs. 13,165/- and had the 2nd and 3rd petitionerplaced on a salary of Rs. 12,900/- each.
Thereafter the establishment realized that the increment is not a right but hadto be earned under sections. 10.1 and 10.9 Chapter VII of the EstablishmentsCode; whereupon on 12. 09. 03 the four petitioners were informed that theyhad to earn the increments on the basic salary of Rs. 11, 310/- and the sumsthey had been paid as increments since appointment after 1.1.2002 in ex-cess of what they were entitled to would be recovered,"amounting to about Rs.94,515/-
The petitioners complained of infringement of Article 12 (1) of the Constitution.Held:
1. Increments of salary is not a right and had to be earned. As such thedecision to recover the monies paid to the Petitioners after 1.1.2202were invalidly paid.
162Sri Lanka Law Repons(2005) 1 Sri L R.
2. There was no violation of the petitiners's fundamental rights underArticle 12 (1) of the Constitution.
APPLICATION for relief for infringement of fundamental rights..
J. C. Weliamuna for petitioner
Sunil F. Coorey with C. Liyanage for 2°“ to l"' respondents.
October 19,2004WIGNESWARAN, J.
The Petitioners were graduate employees of the Sabaragammuwa De-velopment Bank, Ratnapura, holding managerial posts which they allegedwere Supervisory Grade III appointments. Prior to the establishment ofthe said Bank on 1.1.99 the Petitioners were employees of the RegionalRural Development Banks holding Grade III Supervisory appointments.The Petitioners looked forward to being appointed to an “Executive Grade”which was soon to be established in the 1st Respondent Bank. Sincefunctions of such a Grade were performed by them, though the Grade hadnot been established, the Petitioners were paid a sum of Rs. 3200/- asmonthly allowance for the period 1.1.2000 to 31.12.2000. This was paidin the year 2001 too.
By letters dated 22. 10. 2001 (P14A to P14D) the Petitioners wereinformed that they would be absorbed into the “Officer Grade I”. They weretold by the same letters that the allowance of Rs. 3200/- per monthcontinue to be paid until the Petitioners were placed on proper scales.
The Petitioners were promoted to the “Officer Grade 1 ” with effect from1.1.2002. But their letters of appointment dated 3.12.2001 (P15A to P15D) stated that the allowance of Rs. 3200/- per monthe would not be paidafter 31. 12. 2001 since the new salary payable to them had taken intoaccount the allowance that was earlier paid to them.
From January 2002 up to August 2003, Petioners were paid a salarywhich fell within the salary scale 11310/— 16430/-
265/-X 8-300/-x 10
SCPremadasa and others163
V. Sabaragamuwa Development Bank and Others
The 1st Petitioner received Rs. 11310/- + 265 X 7 = 13165/ =, the 2ndPetitioner 11310/=+ 265X6=12900/-, the 3rd Petitioner also Rs. 12900/=and the 4th Petitioner Rs. 13165 /-= as paid to the 1 st Petitioner.
By letters dated 12.09.03 (P21A – P21D) the Petitioners were in -formed as follow:
That they were entitled only to the increments earned after 1.1.2002
Accordingly all excess payments amounting to about RS. 94515/-paid until then, would be recovered.
That the petitioners would be placed on the basic salary of Rs.11310/-as at 1.1.2002.
This was objected to by the Petitioners (P23A – P23D)
The Petitioners came into Court thereafter alleging infringement of theirfundamental rights guaranteed to them under Article 12 (1) of the Consti-tution and seeking a declaration regarding such alleged violation, anorder nullifying the decisions communicated by P21A – P21D and askingfor interim relief and other reliefs.
An undertaking was given by Counsel for the 1st to 7th Respondentson 19. 11.2003 that the purported excess salary paid to the Petitionerswould not be recovered until the determination of this application. Leave toproceed in respect of the alleged infringement of Article 12 (1) of theConstitution was granted on 17.02.04
This matter came up before us on 23. 08. 04 and written submissionswere-thereafter filed.
The learned attorney at – law for the Petitioners in his written submis-sions has submitted as follows:
“In order to implement (the) decision of the Board of Directors andto place the Petitioners in the relevant salary step the managementhad to take into account the interim allowance of Rs. 3,200/- Thus themanagement made the following adjustments by way of increments inrespect of each of the Petitioners.
164Sri Lanka Law Reports(2005) 1 Sri L. R.
1s' Petitioner -11,310/- + 265X7= 13,165/= (7increments)
2nd Petitioner -11,310/- + 265X6= 13,165/= (6 increments)
3rd Petitioner -11,310/- + 265X6= 13,165/= (6 increments)
4m Petitioner -11,310/- + 265X7= 13,165/= (7increments)
It was contended by the learned Counsel for the Petitioner at the hear-ing that unless they were placed at the abovesaid salary scale they wouldhave been deprived and denied of at least three increments due to no faultof the Petitoners. He contended that the Petitioners were enttled to earnthree increments during the period 1999 to 2002.
The learned Counsel further pointed out that it was the Board of Directorswho should determine the salaries of its employees and that preciselywas what had taken place, the letters P15A to P15D having been signedby the General Manager. He disputed that the Petitioners could havebeen placed on the intitial salary step of Rs. 11310/-. He also disputedthe contention that salaries of the Petitioners should be decided by theCollective Agreedment (P13) signed between the Bank (1 st Respondent)and the Ceylon Bank Employees’ Union. He argued in the light of Section30 (2) of the Regional Development Banks Act, No. 6 of 1997, if the Boardof Directors had decided to place the Petitioner on.a higher salary scale,then there was no .basis to vary its decision based on the CollectiveAgreement. In any event he said there was no basis for the recovering ofthe payments duly made.
The Learned Counsel made a significant plea which is also reflected inthe written submissions – ‘The Petitioners were denied increments due tono fault on the part of the Petitioners. Thus at least the salary of thePetitioners should be Rs. 11310/-+ 265 X3= 12105= as at 1.1.2002” .Thisshows that the Counsel himself seems to have had reservations withregard to the adding up of seven and six increments arbitrarily.
The counter affidavit filed by the 1st Petitioner has stated that it wasonly the salary scale that was to be decided according to the CollectiveAgreement. The salary step had to be decided according to the provi-. sions of Chapter VII of the Establishments Code and the Administrationand Disciplinary Hand Book of the Bank.
All these submissions would now be considered
SCPremadasa and others165
V. Sabaragamuwa Development Bank and Others
The basic question to be answered is whether the Petitioners on pro-motion to “Officer Grade I” were to be placed at the initial salary step ofRs. 11310/- or were entitled to be placed at a salary step above the initialsalary. The rationale for placing the Petitioners at a step above the initialsalary would be that they had earned certain increments already. In thisinstance the learned Counsel for the Petitioners had argued that thePetitioners were at least entitled to increments for the years 1999 to 2002
Chapter 7 Section 10:1 and 10:9 of the Establishments Code'refers toincrements asfollows:
10:1 “An officer is not entitled to draw an increment as of right. He isrequired to earn it by the efficient and diligent dishcharge of hisduties and by serving the incremental period in full (see sub-section 10:9). A certificate to that effect should be signed bythe appropriate authority before an increment is paid”
10:9 “An increment should be granted only if the full incrementalperiod has been served. Any period of leave with full pay or halfpay will count as service for increments”
Under the Collective Agreement ( P 13) there was no dispute that thePetitioners were entitled to be placed at the salary scale for “Officer Grade”
1 which was
The increments of 265X8 and 300X10 were to be earned only after anofficer was placed at the initial salary scale of Rs. 113101-. The Petition-ers were entitled to be considered for the abovesaid salary scale of Rs.11310/= only from 01.01.2002 and not before that. Therefore the argu-ment that the Petitioners had worked during the period 1999 to 2002 andthus earned 3 increments appears untenable. There was no question ofthe Petitioners being entitled to a salary scale or Rs. 11310/- in the year1999 nor 2000 nor 2001. When they were placed on 01.01.2002 in thissalary scale only could they have earned an increment. That is, afterthey became entitled to receive the new salary scale and not before it.
166Sri Lanka Law Reports(2005) 1 Sri L. R.
We are unable to accept the submission that in order to implementthe decision of the Board of Directors the management had to place thePetitioners in the relevant salary step. The interim allowance of Rs. 3200/was paid monthly on account of the fact that the Petitioners performedthe functions of an executive Grade as from 1999. Nor did the Board ofDirectors resolve to predate the appointment of the Petitioners to a dateanterior to 01.01.2002. They only resolved that the salary scales given inthe Collective Agreement (P13) should come into force from 01.01.2002.
There seems to be truth in the submissions of the learned Counsel forthe Respondents that the 1 st Petitioner who was in charge of computa-tion of salaries of all employees of the Bank had conveniently given him-self and the 4th Petitioner 7 increments each and to the 2nd and 3rdPetitioners 6 increments each from 01.01.2002 although there seems tobe no basis whatsoever for such a course of action. Even the learnedCounsel for the Petitioners only argued for 3 increments. He placed novalid grounds before us as to the basis of granting 7 increments and 6increments to the Petitioners as referred to above. There had been nodecision arrived at by the Board of Directors of the 1st Respondent Bankthat any unearned increments should be paid to any particular employee.
Section 30(2) of the Regional Development Banks, Act. No. 6 of 1997was referred to. It has no relevance to this case. The Board of Directorsdid not decide to place the Petitioners on a higher salary scale other thanto abide by the Collective Agreement by which the salary scale wasdetermined.
If for argument purposes the 7 and 6 increments allowed to the Peti-tioners had been wrongly determined and say only 3 increments werepayable, then the amount paid in excess of the three increments wouldhave to be refunded. Thus the contention that a duly paid payment can-not be recovered would fail even if the payment was “duly” paid couldcertainly be recovered. It is to be noted that the salary anomaly in re-spect of the Petitioners was brought to the notice of the Board of Direc-tors of the 1 st Respondent Bank by P22 and thereafter the board decidedto correct the anomaly and recover over payments which had no basisand which seem to have been obtained by the Petitioners without a legalbasis. Therefore steps to recover over payments cannot be faulted.
SCHarjani and Another Us167
Indian Overseas Bank and Others
We therefore find that there has been no violation of the fundamentalrights of the Petitioners under Article 12 (1) of the Constitution and thatthe decisions communicated by P21 A to P21D were valid in law. Wedismiss this application fixing a sum of Rs. 10000/- as costs'payable tothe 1 st Respondent by the Petitioners jointly and severally.
DISSANAYAKA, J.- I agree
FERNANDO, J -1 agree
PREMADASA AND OTHERS vs. SABARAGAMUWA DEVELOPMENT BANK AND OTHERS