STATE BANK OF INDIA vs K.P. SUBBAIAH .

The Supreme Court addressed the issue of pay fixation for ex-servicemen employed by the State Bank of India, focusing on the applicability of the Fourth Bipartite Settlement and the protection of pay and allowances as per government policy. The Court held that the employees' pay should be revised according to the new scales under the Fourth Bipartite Settlement, with retrospective effect from their date of joining, thereby ensuring that their last drawn pay in military service is protected. The judgment overturned the Bank's circulars that reduced the employees' pay, affirming the employees' right to proper pay fixation as per the applicable settlements.