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PETITIONER: C.M.D., PUNJAB NATIONAL BANK & ORS.

       Vs.

RESPONDENT: RAJENDRA NATH CHAWLA

DATE OF JUDGMENT:       31/01/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. HANSARIA B.L. (J) MAJMUDAR S.B. (J)

CITATION:  1996 SCC  (7) 282        JT 1996 (1)   685  1996 SCALE  (1)660

ACT:

HEADNOTE:

JUDGMENT:                     J U D G M E N T K.Ramaswamy.J.      Leave granted.      This appeal by special leave arises from the order of the  Delhi High  Court dated  March 31, 1995 in Writ Petition No.5199  of 1993.  On September  29, 1989, the appellant had issued a Circular letter No.43/89 stating that  in   accordance  with  the  instructions  of  the Government,  the   Bank  had   decided  to  permit  the officers, who were otherwise eligible for consideration for promotion  but could  not complete the rural branch experience for no fault of theirs, to be considered for promotion to  Middle Management  Grade  Scale  II  [for short, ’M.M.6.  Scale -  II’] subject  to the following conditions:      "(a) The promoted officers would be      straight  away   posted  to   rural      branches for  requisite  number  of      years and  under  no  circumstances      would be  allowed to shift to other      areas before  completion  of  their      tenure  of   rural   posting.   The      concerned  officers   have  already      furnished the  written  undertaking      to this  effect at  the time of the      interview.      (b)  The   officers,   who   refuse      posting  in   Rural  branches,   as      mentioned in  (a) above,  shall  be      debarred  for   consideration   for      promotion for a period of two years      from the date they become eligible,      after     fulfilling      promotion      criteria, including necessary rural

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    branch service.      (c) In  case  of  any  reason,  the      promotee officer  has to  leave the      rural branch prior to completion of      the tenure, he shall be reverted to      Junior Management Grade Scale I."      On January 9, 1990, the respondent was informed of the approval for his promotion to M.M.G. Scale - II and that he  was  allocated  Punjab  Zone  subject  to  the conditions mentioned hereinbefore. He was also informed that in  case he  would refuse posting in rural branch, he shall  be debarred  for consideration  for promotion for a  period of  2 years  from  the  date  he  becomes eligible  after   fulfilling  the   promotion  criteria including  necessary   rural  branch   experience.  The respondent, by  his letter  dated January 13, 1990, did not accept  rural branch  posting in  Punjab Zone  upon promotion. By  letter dated  January 13-15,  1990,  the respondent was  informed of  the bar  in terms  of  the promotion policy  and guidelines  and that since he had refused to  accept the  promotion vide his letter dated January 13,  1990 for promotion to M.M.G. Scale - II in terms of  the promotion  policy. he  was  debarred  for consideration for  promotion for  a period  of 2  years from the  date he  became eligible after fulfilling the promotion criteria  including  necessary  rural  branch experience.      On  March  21,  1990,  new  promotion  policy  was circulated by  the appellant in terms of the Government guidelines which  provided, inter  alia,  that  for  an officer in  Junior Management  Grade Scale I (for short J.M.G. Scale  - I) to become eligible for consideration for promotion  to M.M.G.  Scale -  II, he should have 7 years of  satisfactory service including minimum of two years’ service as an officer in rural branch. The Delhi Zonal Office  by its  circular dated September 16 1991, invited  applications   for  rural  posting  in  nearby region. The  respondent had applied on October 15, 1991 for rural  branch  posting  in  Meerut  region,  Karnal region and  Rohtak  region.  The  head  office  of  the appellant by its letter dated February 5, 1992 informed its  Delhi   Zonal  Office  that  the  request  of  the respondent for  his posting  in rural  branch in Meerut has been  acceded to  and that  on his  appointment  by promotion, he may immediately be relieved. After he had joined, by  letter dated  March 3,  1992 the respondent requested for  cancellation of  his posting  for  rural branch in  Meerut region.  Accordingly, the Delhi Zonal Office by  letter dated  May 4,  1992 informed  him  of cancellation of  the posting  in rural branch in Meerut region at  his request. He was further informed that he was bound  by the  consequences of  his refusal  to the posting in terms of rules to guidelines enforced by the Government from time to time.      On October  15, 1992,  Delhi Zonal  Office in  its circular No.40  of 1992 invited application for posting in rural  branches in  Delhi. The  respondent  did  not offer himself  for  posting  in  any  rural  branch  to complete the  requisite two  years’ rural posting which is a pre-condition for eligibility to be considered for promotion to M.M.G. Scale - II . When applications were invited for  promotion to  M.M  G.  Scale  -  II  posts through circular  dated March  30, 1993  to fill up the vacancies as  per the eligibility criteria laid down in circular No.1271  dated  March  2  the  respondent  had

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applied   for    consideration   of   his   claim   and inadvertently he was permitted to appear in the written examination and  interview. Pursuant to his application in July, 1993, he was informed that he was not eligible to be  considered for  promotion in terms of the letter of debar  issued to  him. Consequently.  the result  of written examination  and interview  of  the  respondent were withheld.  He was  also informed  by letter  dated November 4, 1993 that he was debarred for promotion for a  period   of  two  years  from  the  date  he  became ineligible  for   promotion  until   he  fulfilled  the promotion criteria  including  necessary  rural  branch experience which  he did  not  fulfill  for  selection. Aggrieved thereby,  he filed  the above  writ petition. The High  Court  has  allowed  the  writ  petition  and quashed the aforesaid letter and directed the appellant to  declare  the  result  of  the  examination  of  the petitioner and  that he  was found  qualified. to  give promotion in  either of the channels A and B, since the appellant was  bound by terms of the promotion given as per 1991 policy read with circular of 1993.       At this stage, it may be relevant to mention that promotion policy  for officers  has been  framed by the Board of  Directors of  the  appellant  exercising  its statutory power  under Regulation 17 of Punjab National Bank Officers  (Service) Regulations  (for short,  ’the Regulation’) and  Section 19 read with Section 12(2) of the Banking  Companies  (Acquisition  and  Transfer  of Undertaking)  Act,  1970  (for  short,  ’the  Act’)  in consultation  with  Reserve  Bank  of  India  and  with previous sanction  of the Central Government. According to the  said policy,  an  officer  for  promotion  from J.M.G. Scale  I to  M.M.G. Scale  - II,  should have  7 years of  satisfactory service and experience inclusive of 2  years’ rural branch experience as a pre-condition to be  eligible for  consideration for  promotion.  The Board of Directors of the Bank (for short, ’the Board’) pursuant to  Government guidelines decided to relax the pre-condition of  rural  posting  by  making  it  post- condition, since the Bank was not able to provide rural posting to  all officers due to which a large number of officers  could  not  fulfil  the  condition  of  rural posting for  two years,  although they  had completed 7 years’ service.  On December  2, 1987, the Board in its promotion policy  in  terms  of  Government  guidelines clarified that  the policy would be effective from 1988 selection onwards.  It  was  also  clarified  that  the condition of rural posting experience stipulating rural branch experience was to be operative from June 1, 1988 which was accordingly circulated to all the officers on February 22, 1988 which read thus:      "ELIGIBILITY      Officers   promoted   as   Officer-      Incharge/Asstt.   Manager    before      20.8.80 shall  rank  for  seniority      higher  than  the  Accountants  and      Technical/Specialist  Officers   in      JMG Scale-I  in terms of Regulation      18(5).      Officer-Incharge/Asst. Manager  and      other officers  in Scale  I with  a      minimum of  7 years of satisfactory      service  as   shall   be   eligible      provided they have put in two years      of service in a rural branch."

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    In the  circular No.1164 dated August 3, 1989, the officers were informed that written test was to be held or, September  17, 1989  with the stipulation that last date for  receipt of application was 25th August, 1989. The eligibility  criteria for  selection was stipulated as under :      "Officers-Incharge/Asstt.  Managers      and other  officers in  JMG Scale I      with  a   minimum  of  7  years  of      satisfactory  service  as  on  31st      August, 1989  will be  eligible for      appearing in the written test.      In terms  of Government guidelines,      officers in  JMG Scale  1  will  be      eligible for  promotion to Scale II      provided they   have put in 2 years      of   service   in   Rural   branch.      However,  the   Officers  who   are      otherwise eligible for promotion in      terms of  eligibility criteria  but      could not  complete  the  requisite      rural/semi- urban experience for no      fault of  theirs, may be considered      for  promotion   subject   to   the      stipulation that  such officers  if      approved   would   be   immediately      posted in rural/semi-urban branches      for  requisite  no.  of  years  and      under no circumstances they will be      allowed by  the Bank  to  shift  to      other areas  before  they  complete      the  tenure   of  rural  semi-urban      posting.  The   individual  officer      shall  furnish  an  undertaking  to      this effect  while applying for the      written test. Please note that case      letter/roll   no.   will   not   be      allotted   unless   the   candidate      furnishes unconditional undertaking      as per  Proforma enclosed  with the      application form  to  be  submitted      for appearing in the written test.      The promotion  also, therefore,  became  operative even from June 1, 1988.      On March  21, 1989,  in terms of the guidelines of the  Government   of  India,  the  Board  approved  the eligibility criteria  regarding rural/semi-urban branch experience in the promotion policy thus:      "The  officers  who  are  otherwise      eligible for  promotion in terms of      eligibility criteria  but could not      complete the   requisite rural/semi      urban experience   for  no fault of      theirs,    may  be  considered  for      promotion    subject     to     the      stipulation that  such officers, if      approved,  would   be   immediately      posted in rural/semi-urban branches      for requisite  number of  years and      under no  circumstances. they  will      be allowed  by the Bank to shift to      other areas  before            they      complete the  tenure of  rural/semi      urban   posting.   The   individual      officer    shall     furnish     an

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    undertaking to  this effect  during      selection process."      On September  29, 1989  in the  circular  No.43/89 applicability of  the debar  clause was considered. The circular read as under:      "The promotion  policy for officers      staff   contained    in   Personnel      Division  Circular   No.1081  dated      22nd February, 1988 provides that:-      "An Officer  who refuses posting on      promotion or  seek reversion  after      accepting the  promotion,  will  be      debarred from appearing in the next      two successive  selections  to  the      next  scale.  In  the  case  of  an      Officer who  seeks reversion  after      accepting   the    promotion,   the      selections  for   the  purpose   of      treating   him   as   having   been      debarred shall be reckoned from the      date   succeeding   the   date   of      reversion."      The   Government    guidelines   in      respect of  promotion  of  Officers      from JMG  Scale -  I to MMG Scale -      II provide  that an  Officer in JMG      Scale  -   I  having   7  years  of      satisfactory   service   shall   be      legible   for   consideration   for      promotion provided  he has put in a      minimum of  two years  service in a      rural branch. As regards Specialist      Officer,   he   should   take   the      requisite rural  branch  experience      as and when he switches over to the      mainstream    of     banking.    In      accordance with the instructions of      the  Government   for   the   above      selection, as  a very special case,      it  has  been  permitted  that  the      Officers who are otherwise eligible      for   promotion   but   could   not      complete the requisite rural branch      experience for  no fault  of theirs      may be  considered for promotion to      MMG  Scale  -  II  subject  to  the      following stipulations:-      (a) The  promoted Officer  would be      straight  away   posted  to   rural      branches for  requisite  number  of      years and  under  no  circumstances      would be  allowed to shift to other      areas before  completion  of  their      tenure  of   rural   posting.   The      concerned  Officers   have  already      furnished the  written  undertaking      to this  effect at  the time of the      interview.      (b)  The   Officers,   who   refuse      posting  in   rural  branches,   as      mentioned in  (a) above,  shall  be      debarred   for   consideration   of      promotion for  a period  of 2 years      from the date they become eligible,      after  fulfilling   the   promotion

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    criteria, including necessary rural      branch service.      (c) In  case for  any  reason,  the      promotee Officer  has to  leave the      rural branch prior to completion of      the tenure, he shall be reverted to      JMG Scale - I." On August  16, 1989,  Government of  India, Ministry of Finance had  granted formal relaxation to the appellant to  the   pre-condition  of  two  years’  rural  branch experience  as   a  post-condition   subject   to   the stipulations as under:      "Govt. is keen that guidelines with      regard to  rural/semi urban posting      are implemented  by  the  banks  in      right earnestness.  As a  matter of      principle banks  could not be given      any relaxation  unless they satisfy      the      Govt.       that       all      possible steps  have been  taken to      provide the requisite experience to      the eligible officers and there has      been no  laxity on  the part of the      management in this regard. However,      in  view   of   the   circumstances      explained by the bank, the Govt. is      agreeable, as  a very  special case      and for  the  last  time,  to  your      proposal that officers who have not      acquired the  requisite  rural/semi      urban experience  but are otherwise      eligible may also be considered for      promotion  subject to the following      stipulations:-      i) Such  promoted officers would be      straight away  posted to rural/semi      urban areas,  as the  case may  be,      for requisite  number of  years and      under no  circumstances would  they      be allowed  to shift to other areas      before completion  of their  tenure      of rural/semi urban posting.      ii)  Officers   who  have   refused      posting   in the  rural/semi  urban      areas earlier, as a result of which      they could  not          attain the      requisite experience,  would not be      considered  for   promotion  for  a      period of  two years  from the date      they otherwise  become eligible for      promotion.      iii) Bank  would obtain  a  written      undertaking from  such officers  to      the effect  that they  will undergo      rural/semi urban  posting on  their      promotion and  no exception will be      allowed. In case for any reason the      promoted     officer     has     to      leave the  rural/semi  urban  areas      prior  to  the  completion  of  the      tenure, the  bank would  revert him      to his earlier grade.      iv) The bank will draw up an action      plan for  posting officers  at  all      India level  in order  of seniority

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    to rural/semi  urban areas  against      the  available   slots.  For   this      purpose necessary  changes  in  the      transfer  policy  of  the  bank  to      permit inter-zonal  transfers  will      be   effected    immediately.   The      progress  made  under  this  action      plan  will  be  placed  before  the      Board  of  Directors  on  quarterly      basis and  a  copy  of  the  action      plan/quarterly  reviewed  shall  be      sent to the Banking Division."      In Circular  No.1271 dated  March 21, 1991 dealing with the promotion policy for officers, the eligibility criteria for  promotion from JMG Scale - 1 to MMJ Scale - II  was reiterated  thus: "7  years  of  satisfactory service in  JMG Scale -I, provided the officers had put in a  minimum of  two years  service as an Officer in a rural  branch"   and   in   para   XIV   dealing   with "Consequences of absence in interview, non approval and refusal to accept promotion", it was stated as under:      "i) If an Officer is ultimately not      selected  for   promotion  in   any      selection, he  will be  eligible to      participate in  the next selection.      If an  Officer is  not selected for      promotion   in    two    successive      selections, he will be eligible for      consideration after  a gap  of  one      year. Thereafter,  there shall be a      gap  of   two  years  for  becoming      eligible for consideration.      ii)   An    Officer   who   refuses      promotion in  higher grade  will be      eligible  for   consideration   for      promotion after a gap of two veers.      For the  purpose of  Sub-clause (i)      and  (ii)   mentioned  above,   the      period of  one/two years  shall  be      reckoned from  the date of approval      of  the   panel  by  the  Competent      Authority and  the ineligibility on      account of  debar  of  one  or  two      years, as  the case  may be,  shall      extend further upto 30th September,      in case the competent authority has      approved the  panel  in  the  first      half of  the financial year or 31st      March   in   case   the   competent      authority has approved the panel in      the second  half of  the  financial      year.      iii) An Officer who seeks reversion      after accepting  the promotion will      be eligible  for consideration  for      promotion after a gap of two years.      The period  of two  years  in  this      case will be reckoned from the date      of     reversion      to      lower      scale."      It would  thus be  clear that though the requirement of filfilling  eligibility   criteria,  apart   from  7  years’ satisfactory service  as JMG Scale - I to MMG Scale - II and two years  of service  in rural/semi-urban branch, is a pre- condition for  promotion, relaxation  was given  only due to

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the fact  that  some  of  the  officers  did  not  have  the opportunity to  complete two  years’ experience, though they had  acquired  7  years’  satisfactory  qualifying  service. Consequently, the  policy was adopted to relax pre-condition by making  it post promotional condition. After promotion to MMG Scale  - II  on completion of 2 years’ experience in the rural service,  the officer  becomes fully qualified and his ranking in  seniority would be above his immediate Junior in the JMG Scale - I, As a consequence of the change in policy, two systems, i.e., A and B lists were prepared and they were to  continue   only  for  the  purpose  of  identifying  the officers.      The High  Court found that due to omission of the words "for no fault of theirs", the relaxation of 2 years’ service had been  granted and.  therefore, from  the initial date of the expiry  of 2  years from  the date  of refusal,  he  had become eligible  for consideration;  and the  denial thereof voilated his  right under Article 14 and was invalid in law. It is  contended by  Shri V.R. Reddy, the learned Additional Solicitor General, that the view expressed by the High Court is not correct. Once an officer refuses to accept promotion, the bar  of 2  years starts  from the date of refusal and he becomes ineligible  for consideration. Thus from the date of refusal, for  two years  he cannot  be considered at all for promotion. But  thereafter when  he is  to be considered for promotion he  is further  required  to  have  fulfilled  the additional promotion criteria, namely, two years’ experience of rural  branch service.  Till that happens he would not be entitled to  be considered for promotion. The High Court has assumed that after two years of first rejection of promotion he should  be considered  for promotion even though he might not have  completed two  years of experience of rural branck service. Though  opportunity was given to the respondent and after promotion  he had joined, he himself got it cancelled. Therefore,  from   the  date   of  cancellation,  he  became inaligible. He  was, by  inadvertent mistake,  permitted  to appear in the fixamination and interview but once he did not complete two years from the date of his refusal as mentioned in  the   narration  of  the  facts  or  from  the  date  of cancellation, after joining he did not become eligible until two years’  period expired.  Shri Madhava Reddy, the learned senior counsel  contended that the bar of two years would be applicable on  his first  declining to accept the promotion. Thereafter, on  his appearing  for selection  and  on  being found selected, he must get the prhmntinn and if he declined to accept  thereafter bar  of two  years would  begin to run from that  date. That  had happened  in the  first offer  of October 1991  and so  in l993,  he  became  eligible  Though persons similarly situated had been promoted, the respondent was denied  of the  same and,  therefore, the High Court was right in  its conclusion  that the respondent is entitled to the benefit.  We find  no force  in the  contention of  Shri Madhava Reddy.      It is  seen that on his refusal to accept the promotion or on its cancellation, he became ineligible for 2 years for consideration; the  reason being  that 2  years’ rural/semi- urban service  was a  pre-condition which,  though later  on made  a   post-condition,  remained   to  be   a   mandatory requirement. It  was open  to an officer, before he appeared in examination  and interview  not to  opt for promotion. On exercise of  option he  was  considered,  promoted  and  was posted to  rural service; the officer accepted the promotion and after  he joined  the M.M.G.  Scale -  II post,  he  was required to  complete at  least two  years, if  not  already completed, or  the residue  period. If, without completing 2

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years, on  his own  volition, he  gets his posting cancclled and reverted to J.M.G. Scale-I and thereafter gets posted in an urban  branch, the  bar becomes  operative and he becomes ineligible for  promotion to M.M.G. Scale - II for two years from the  date of  cancellation. therefore,  the question of putting him  in A  list or B list does not arise. That would arise only in a case where the officer, for no fault of him, was not  given opportunity  to serve  in rural or semi-urban branch; even  though he  became qualified after putting in 7 years of satisfactory service, he will then be put in B list and on  his selection and promotion as M.M.G. Scale - II, he will be posted vo rural/semi-urban branch. On his completion of 2  years’ service  or the balance period, he would become fully qualified  and secure  seniority  from  the  date  his immediate junior  in List  A had  joined the  post of M.M.G. Scale -  II. That facility is inapplicable to an officer who had refused,  on his  own volition,  to accept the promotion and hat  opted for  urban posting.  Thus the  High Court was wholly wrong  in its  conclusion that  the appellant  became qualified in  1993. The  view of the High Court that the bar of 2 years is not applicable to him, is clearly incorrect.      In the  additional affidavit  filed, the  appellant has stated that  no discrimination  was shown to the respondent. All the  officers are  those who  had not accepted promotion and had  thus remained in urban branches but after promotion they opted  for continuance  in rural/semi-urban service for the period of 2 years.      The appeal  is accordingly  allowed. The  order of  the High Court  is set  aside. Consequently  the  writ  petition stands dismissed. No costs.