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PETITIONER: B. V. SIVAIAH & ORS.

       Vs.

RESPONDENT: K. ADDANKI BABU & ORS.

DATE OF JUDGMENT:       17/07/1998

BENCH: S.C. AGRAWAL, S.P. BHARUCHA, B.N. KIRPAL

ACT:

HEADNOTE:

JUDGMENT:      [ WITH  CIVIL APPEAL  NOS. 3809-3810 of 1996, 3799-3803      of 1996,  3811-3812 of  1996 and  3804-3808 of 1996 AND      CIVIL APPEAL  NO. 3297  OF 1998  {arising out of S.L.P.      (C) No.  7321 of  1997], CIVIL  APPEAL NOS 3298-3299 OF      1998 {arising  out of  S.L.P. (C)  Nos. 17780-17781  of      1997}  and  CIVIL  APPEAL  NOS....  3300-3301  OF  1998      {arising out of S.L.P. (C) No. 19965-19966 of 1997}]                       J U D G M E N T S. C. AGRAWAL, J.      Leave granted in all Special Petitions.      What is meant by "seniority - cum-merit", the criterion prescribed for  promotion the  post of  Area  Manager/Senior Manager in the Regional Rural Banks under the Regional Rural Banks  (Appointment  &  Promotions  of  Officers  and  Other Employees) Rules,  1988 [hereinafter  referred  to  as  ’the Rules’] ?  This is  the  common  question  which  falls  for consideration in these appeals.      The regional  Rural Banks  have been  established under the  provisions  of  the  Regional  Rural  banks  Act,  1976 [hereinafter referred  to as  ’the Act’].  Section 17 of the Act empowers a Regional Rural Bank to appoint such number of officers and  other officers as it may consider necessary or desirable, in  such manner  as may  be  prescribe,  for  the efficient performance  of is  functions and to determine the terms  and  conditions  of  their  appointment  and  service Section 24 of the Act lays down that in the discharge of its functions a  Regional Rural  Bank shall  be guided  by  such directions, in  regard to matters of policy involving public interest, as  the Central Government may, after consultation with  the   national  Bank   for  Agricultural   and   Rural Development  [hereinafter   referred  to  as  ’the  National Bank’], give.  Under Section  29  of  the  Act  the  Central Government  has   been  empowered   to  make   rules,  after consultation with  the National  Bank and  sponsor Bank, for carrying out  the provisions  of the  Act, By clause (ba) of sub-section (2)  of section  29, which  was inserted  by the Regional Rural  Banks (Amendment)  Act,  1987,  the  Central Government was empowered to make Rules relating to manner in which the officers and other employees of the Regional Rural Bank shall be appointed. In exercise of the powers conferred

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under Section 29 read with Section 17 of the Act the Central Government  framed  the  Rules  which  were  published  vide Notification dated September 28, 1988.      Rule  3  of  the  Rules  provides  that  the  Board  of Directors of  each Regional  Rural Bank may, in consultation with its  sponsor Bank,  create  such  number  of  posts  as specified in second schedule to the Rules from time to time. Rule 4  prescribes that  the  Board  of  Directors  may,  in consultation with  the sponsor Bank, determine the number of vacancies in each post keeping in view the guidelines issued by the  Central Government  from time  to time. Rule 5 makes provision for  filling of  vacancies and  provides that  all vacancies determined  under Rule 4 by the Board of Directors shall  be   filled  by   deputation,  promotion   or  direct recruitment in  accordance with  the provisions contained in the Second  Schedule to  the Rules.  With regard the post of Area/Senior Manager  the following  provision is made in the Second Schedule to the Rules:- "7. Area Managers or Senior Managers (a) source of Recruitment:                             Hundred per cent by promotion                             from amongst confirmed officers                             working in the bank. Promotions                             will be on the basis of                             serniority-cum-merit. If                             suitable officers are not                             available internally, these                             posts could be filled by taking                             temporarily officers of the                             sponsor banks and other banks or                             organisations on deputation’ (b) Qualification & Eligibility :                              ( i) A Graduate of                             recognized University or any                             equivalent qualifications                             recognized as such by Government                             of India, preference being given                             to Agriculture or Commerce or                             Economics graduates.                             (ii) Eight years service as an                             officer in the regional rural                             bank concerned. provided that                             the Board may, with the prior                             approval of National Bank, relax                             the period of service by a                             period not exceeding two years,                             if suitable candidates of                             requisite experience are not                             available.                             Note: The post of Area Managers                             and Senior Managers will be                             equivalent in rank and will be                             interchangeable. (c) Mode of Selection :                             Interview and assessment of                             performance reports for the                             preceding three years period as                             officer for promotion."      Prior to the making of the Rule appointment on the post of Area/Senior  Manager in Regional Rural Banks was governed by circulars  issued  by  the  Central  Government  and  the National Bank.  By circular dated October 10, 1987 addressed to the  Deputy General  manager of  the National  Bank,  the Central Government indicated the criterian that was required to be followed in the matter of promotion of Branch Managers

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to the  post of  Area Managers/Senior  Managers in  Regional Rural Banks in the following terms:-      ".......    it    is,    therefore,      requested that  the Chairman of all      the RRBs may be apprised that since      the posts  of Area  Managers/Senior      Managers are  promotional posts  to      be filled up 100% by promotion from      only one  source, the non-selection      rule of  seniority cum merit has to      be applied.  This  rural  envisages      promotion  by  seniority  with  due      consideration      to       minimum      merit/fitness  prescribed.  Fitness      implies  that   there  is   nothing      against     the     officer.     No      disciplinary  action   is   pending      against    him    and    none    is      contemplated.   The   officer   has      neither been  reprimanded  nor  any      adverse remarks  have been conveyed      to him  in  the  reasonably  recent      past. The  promotions are  meant to      be  made  on  the  above  mentioned      consideration."                     [emphasis supplied ]      In accordance  with the said circular the National Bank issued a  circular dated  December 1,  1987 whereby  all the Regional Rural  Banks were apprised that the matter relating to  the   promotion  of  Branch  Mangers  to  the  posts  of Area/Senior Managers  had been  examined by  it consultation with the  Government of  India and  the Regional Rural Banks were advised as under: -      " The posts of Area Managers/Senior      Managers are  promotional posts  to      be filled up by 100% promotion from      only one  source and  non-selection      rule of  seniority-cum-merit has to      be  applied.  This  rule  envisages      promotion  by  seniority  with  due      consideration      to       minimum      merit/fitness  prescribed.  Fitness      implies  that   there  is   nothing      against     the     officer;     no      disciplinary  action   is   pending      against    him    and    none    is      contemplated.   The   officer   has      neither been  reprimanded  nor  any      adverse remarks  have been conveyed      to him  in  the  reasonably  recent      past. The  promotions are  meant to      be  made  on  the  above  mentioned      consideration only. In other words,      if   a    manager   satisfies   the      qualifications   and    eligibility      criteria  and   there  is   nothing      adverse  against   him,   his   due      promotion should  not be  denied to      him."      These appeals  can be  categorised in two groups, viz., the Andhra  Pradesh group  and the Madhya Pradesh group. The Andhra Pradesh  group of  appeals are  directed against  the judgment of  the Division  Bench of  the Andhra Pradesh High Court dated  September 23, 1994 in various writ appeals. The Madhya Pradesh  group of appeals have been filed against the

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judgments  of  the  Madhya  Pradesh  High  Court.  The  main judgment, which  has been followed by the said High Court in other cases,  is in  L.P.A. No.  151 of  1993 and  connected matters  decided   on  October  9,  1996.  In  the  impugned judgments, the  High Courts  of Andhra  Pradesh  and  Madhya Pradesh have  taken the  view that  if "seniority -cum-merit criterion is adopted for the purpose or promotion then first the senior  most eligible  employee has to be tested to find out whether  he possesses  the minimum  required  merit  for holding the higher post and only if he is not found suitable or fit,  his immediate  junior may be tested for the purpose of promotion. The said view has been assailed by the various Regional Rural  Banks as well as the promoted officers whose promotions have been set aside by the impugned judgments.      In the  matter of formulation of a policy for promotion to a  higher post,  the two  competing principles  which are taken into  account are  inter se  seniority and comparative merit of  employees who  are eligible for promotion. In Sant Ram Sharma  v. State  of Rajasthan & Ors., 1968 (1) SCR 111, this court  has pointed  out that the principle of seniority ensures absolute  objectivity by  requiring all promotion to be made  entirely on grounds of seniority and that if a post falls vacant  it is  filled by  the person  who  had  served longest in  the post  immediately below.  But the  seniority system is  so objective that it fails to take any account of personal merit. It is fair to every official except the best ones, an  official has  nothing to  win or  lose provided he does not  actually become  so inefficient  that disciplinary action has  to be taken against him. The criterion of merit, on the  other hand,  lays stress  on meritorious performance irrespective of  seniority and  even a person, though junior but  much   more  meritorious  performance  irrespective  of seniority and  even a  person, though  junior but  much more meritorious than his seniors, is selected for promotion. The Court has  expressed the view that there should be a correct balance between  seniority and  merit in  a proper promotion policy. the criteria of seniority cum-merit’ and ’merit-cum- seniority’ which  take into  account seniority  as  well  as merit seek to achieve such a balance.      The principle  of  ’merit-cum-seniority’  lays  greater emphasis on  merit and  ability and  seniority plays  a less significant role.  Seniority is to be given weight only when merit and ability are approximately equal. In the context of Rule 5(2) of the Indian Administrative Service/Indian Police Service (Appointment  by promotion)  Regulations, 1955 which prescribed that  "selection for inclusion in such list shall be based  on merit  and suitability in all respects with due regard to  seniority" Mathew.  J. in Union of India v. Mohan Lal Capoor & Ors., 1974 (1) SCR 797, has said :-      " ....  for inclusion  in the list,      merit  and   suitability   in   all      respects should  be  the  governing      consideration  and  that  seniority      should play a secondary role. It is      only when merit and suitability are      roughly equal  that seniority  will      be a  determining factor,  or if it      is not  fairly possible  to make an      assessment inter  se of  the  merit      and  suitability  of  two  eligible      candidates  ad   come  to   a  firm      conclusion,  seniority  would  tilt      the scale." [p.801] Similarly, Beg J. (as the learned Chief Justice then was) has said :-

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    " Thus,  we thin  that the  correct      view, in  conformity with the plain      meaning  of   words  used   in  the      relevant   rules,   is   that   the      "entrance" or  "inclusion" test for      a place  on  the  select  list,  is      competitive ad  comparative applied      to all  eligible candidates and not      minimal  like   pass  marks  at  an      examination.     The      Selection      Committee   has   an   unrestricted      choice  of   the   best   available      talent,   from   amongst   eligible      candidates, determined by reference      to reasonable  criteria applied  in      assessing  the  facts  revealed  by      service  records  of  all  eligible      candidates so  that merit  and  not      mere  seniority  is  the  governing      factor." [p.817]      On the  other hand,  as between  the two  principles of seniority and  merit, the criterion of ’seniority-cum-merit’ lays greater  emphasis on  seniority. In  state of  Mysore & Anr. v.  Syed Mahmood  &  Ors.,  1968  (3)  SCR  363,  while considering Rule  493)(b) f  the Mysore State Civil Services General Recruitment  Rules, 1957 which required promotion to be made  by selection  on the  basis of seniority-cum-merit, this Court  has observed that the rule required promotion to be made  by selection  on the basis of "seniority subject to the fitness  of the candidate to discharge the duties of the post from  among persons  eligible for  promotion".  It  was pointed out  that where the promotion is based on seniority- cum-merit the  officer cannot claim promotion as a matter of right by  virtue of  his seniority  alone and if he is found unfit to  discharge the duties of the higher post, he may be passed over and an officer junior to him maybe promoted.      In State  of Kerala  & Anr. v. N.M. Thomas & Ors., 1976 (1) SCR  906, A.N.  Ray CJ. has thus explained the criterion of ’seniority-cum-merit’:-      "  With  regard  to  promotion  the      normal principles are either merit-      cum-seniority   or   seniority-cum-      merit.  seniority-cum-merit   means      that given  the  minimum  necessary      merit requisite  for efficiency  of      administration, the  senior  though      the  less  meritorious  shall  have      priority." [p.930]      The learned  counsel for  the Regional  Rural Banks and the promoted officers have, however, placed reliance on Para 7(c) of  the Second  Schedule to  the Rules which prescribes that the  mode of selection for promotion would be interview and assessment  of performance  reports  for  the  preceding three years  periods  and  have  submitted  that  under  the criterion of  ’seniority-cum-merit’, as prescribed under the Rules, comparative  merit has to be assessed for the purpose of promotion.  Reliance has  been placed  on  the  following observations in  State of  Mysore v.  C.R. Seshadri  & Ors., 1974 (3) SCR 87 : -      "However,  if   the  criterion  for      promotion is  one of the seniority-      cum-merit, comparative merit has to      be assessed if length of service is      equal or  an outstanding  junior is      available for promotion." [p.89]

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    The learned  counsel for  the Regional  Rural Banks and the promoted  officers have  also  placed  reliance  on  the decision of  this Court  in Jagathigowda,  C.N.  &  Ors.  v. Chairman, Cauvery Gramina Bank & Ors., 1996 (9) SCC 677.      Para 7(c) of the Second Schedule to the Rules does not, in our  opinion, lend  support to  the contention  that  the criterion  of  seniority-cum-merit  envisaged  by  the  Rule making authority  involves assessment  of comparative  merit for the  purpose of promotion. The word "selection" has been used in  the sense  of selecting an officer for promotion on the basis  of  the  criterion  of  seniority-cum-merit.  The requirement that  such selection  shall be made on the basis of interview  and assessment  of performance reports for the preceding three  years is  consistent with  the criterion of seniority-cum-merit as  explained in  the state  of Kerala & Anr. v.  N.  M.  Thomas  &  ors.  (supra)  that  "given  the necessary merit  requisite for efficiency of administration" the senior  though the less meritorious shall have priority. The said  mode enables  an assessment  to be  made about the minimum  necessary   merit  requisite   fr   efficiency   of administration and  it  cannot  be  construed  as  importing assessment of comparative merit of the officers eligible for promotion.      In C.R.  Seshadri (supra) the Court was considering the question whether  High Court could have given a direction to the  State  to  give  to  the  respondent  therein  notional promotion to  the post  of Deputy Secretary with effect from the date  on which  his junior  secured such promotion. This Court said  that such  a direction could not be given by the High Court  because promotion  of a  government servant  was basically in  government’s discretionary  power and  that in the absence  of positive proof of the relevant service rules it was  hazardous to  assume that  by  efflux  of  time  the respondent would  have spiralled  upto Deputy  Secretaryship and that  the proper direction could only be that government would reconsider  the case  of  the  respondent  afresh  for purpose of  notional promotion.  in that context, this Court pointed out  that if  the rule of promotion is one of ’sheer seniority’ it  may well  be that  promotion is  a matter  of course  and   that  if   seniority-cum-merit  is  the  rule, promotion  is   problematical.  Since   the  relevant   rule governing promotion  to the post of Deputy Secretary had not been placed  before it, the Court was not required to define the criterion  of ’seniority-cum-merit’ and to delineate the fine distinction  between the  criterion of  ’seniority-cum- merit’ and  the criterion  of ’merit-cum-seniority’  in  the matter of  promotion. In  the observations on which reliance has been  placed by  the learned counsel for the Rural Banks and  the   promoted   officers   the   distinction   between ’seniority-cum-merit’  and  ’merit-cum-seniority’  has  been obliterated and  both the criterion have been equated. Since comparative assessment of merit is required to be made while applying the  criterion of  ’merit-cum-seniority’  has  been obliterated and  both the criterion have been equated. Since comparative assessment of merit is required to be made while applying  the  criterion  of  ’merit-cum-seniority’  ad  for ’seniority-cum-merit’  no  such  comparative  assessment  is required, the  aforementioned observations  in the  case  of C.R. Seshadri  (supra) on  which reliance  has  been  placed cannot be  regarded as  correctly reflecting  as to  what is meant by the criterion of ’seniority-cum-merit’.      In Jagathigowda  , C.N.  (supra) this Court was dealing with promotion made to the post of senior Manager in a rural bank which  promotion was  made prior  to the  Rules and was governed by  circulars of  the National  Bank dated December

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31, 1984  and April 7, 1986. Circular dated December 31,1984 provided that  promotion to  the post of Area Manager/Senior Manager should  be on  the basis  of seniority-cum-merit. By circular  dated   April  7,  1986  it  was  prescribed  that selection of  the eligible  candidates should  be  based  on performance of  respective candidates  in  the  bank  to  be assessed by  a Staff  Selection Committee after interviewing the candidates.  The selection  was made  by  the  selection Committee after  calling the eligible officers for interview in accordance  with their seniority and in the interview the marks were  awarded according  to the  performance appraisal forms. The  officers who  obtained 85  marks out of 150 were shortlisted  for   promotion.  The   performance   appraisal comprised of  matters such  as dimension  of  work,  general intelligence, job  knowledge, initiative and resourcefulness etc. The  service record  of the  officers who  assailed the promotion before the High Court was adverse. In the judgment under appeal  the High  Court had set aside the promotion on the ground  that service  record of  the recent  past should have been  taken into  consideration and  in case  there was nothing adverse  against an  officer he  could not be denied promotion on  the ground  that some  other junior to him was more meritorious  and that promotions were made on the basis of selection inasmuch as marks were assigned on the basis of performance appraisal  and interview.  The said  judgment of the High  Court was  reversed by this Court. It was observed that the circular dated April 7, 1986 issued by the National Bank  specifically  provided  that  ’the  selection  of  the eligible  candidates  should  be  based  on  performance  of respective candidates  in the  bank’. It  was held  that the High Court was not justified in holding that the performance appraisal  could  not  be  taken  into  consideration  while considering the  officers for  promotion to the higher rank. It was  also observed  that "while  making promotion  on the basis of  seniority-cum-merit the  totality of  the  service record of  the  officer  concerned  has  to  be  taken  into consideration". This judgment, in our opinion, does not make a departure  from the  law laid  down by  this Court  in the earlier judgments  explaining the  criterion of  ’seniority- cum-merit’ because  in this case the selection had been made by taking  into account the seniority as well as performance and performance  was appraised  by assigning  marks  on  the basis of  performance appraisal  and  interview.  Those  who secured 85  marks out  of 150  marks  were  shortlisted  for promotion which  shows that  securing 85  marks out  of  150 marks was  treated as  the minimum  standard  of  merit  for purposes of  promotion and  those  who  satisfied  the  said minimum standard were selected for promotion on the basis of seniority.      On behalf  of the  promoted officers  it was urged that for the  purpose of promotion on the basis of seniority-cum- merit, seniority  means the length of service and that among officers who  were appointed  on the  same date and have the same length  of service  seniority can  have no  bearing and promotion has  to be  made on  a comparative  assessment  of merit of  such officers.  We  are  unable  to  agree.  while applying  the   principle  of  seniority-cum-merit  for  the purpose of  promotion what  is required  to be considered is inter se  seniority of  the employees  who are  eligible for consideration. Such  seniority is normally determined on the basis  of  length  of  service,  but  as  between  employees appointed on  the same  date and  having the  same length of service, but as between employees appointed on the same date and having  the same  length of  service,  it  is  generally determined on  the basis  of placement  in the selected list

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for appointment.  Such determination  of  seniority  confers certain rights  and  the  principle  of  seniority-cum-merit gives effect  to the  such rights flowing from seniority. It cannot, therefore,  be said  that in the matter of promotion the basis of seniority-cum-merit seniority has no role where the employees  eligible for  promotion were appointed on the same date and have the same length of service.      We thus  arrive at the conclusion that the criterion of ’seniority-cum-merit’ in  the matter of promotion postulates that  given   the  minimum  necessary  merit  requisite  for efficiency of  administration the  senior, even  though less meritorious,  shall   have  priority   and   a   comparative assessment  of  merit  is  not  required  to  be  made.  For assessing  the   minimum  necessary   merit  the   competent authority can lay down the minimum standard that is required and also  prescribe the  mode of  assessment can  be made by assigning marks  on the basis of appraisal of performance on the basis  of service  record and  interview and prescribing the minimum  marks  which  would  entitle  a  person  to  be promoted on the basis of seniority-cum-merit.      We may  now examine whether the aforesaid criterion has been correctly followed by the concerned banks in making the impugned promotion. We will first take up the Andhra Pradesh group of  appeals which have been field against the judgment of the  Andhra Pradesh  High Court dated September 23, 1994. These appeals  relate to  two banks, namely, the Rayalaseema Grameena Bank  and the  Pinakini Grameena  Bank. It Would be convenient to  deal with  the appeals  relating to each bank separately.      Rayalaseema  Grameena   Bank  :-   In  March  1988  the Rayalaseema Grameena  Bank decided  to create  four posts of senior Managers  and four posts of Area managers. The Senior Managers work  in the  office whereas the Area Managers work in the  field. By  circular dated March 3, 1988 the Board of Directors of  the Rayalaseema  Grameena Bank  laid down  the following promotion process:-      " A)  ELIGIBILITY :-  The  Officers      who have  put in 8 (Eight) years of      service in the Bank in the cadre of      branch Manager as on 31-12-1987 are      eligible to  be considered  for the      promotion process.      B) MODALITIES :-        ------------      a) Seniority  - 45 marks (0.5 marks                     for each completed                     month of service                     over and above the                     minimum qualifying                     service)      b)Qualif-      ication -      5 marks (Minimum                     qualification                     applicable to the                     cadre shall not be                     reckoned)                Post Graduation - 1 Mark                Diploma/s  - 1 Mark                CAIIB - Part I  - 1 mark                CAIIB - Part II - 2 Marks      (c) Leave -    record - 5 marks      (d) Interview - 30 marks      (e) Performance - 65 marks      0.2,  These   promotions  will   be           effective from 1st May, 1988.

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    0.3. The  eligible candidates  will           be called  for  the  interview           directly ( Candidates need not           submit any application in this           regard) " Following the  said promotion  process eight Branch managers were promoted  with effect  from May  1, 1988 in proceedings dated May  3, 1988.  The Branch Managers who wee promoted as Area/Senior Managers on May 3, 1988 assumed office and their promotions were not questioned by any employee at that time.      After the  Rules framed  by the Central Government vide Notification dated  September 28,  1988 came  into force the Rayalaseema Grameena  Bank, in  September 1989,  decided  to create five  posts of  Area/senior Managers and, by circular dated September 27, 1989, formulated the following promotion process for filling up of these five posts: -      "1. ELIGIBILITY :-     -----------      All the  Officer (Branch  Managers)      who have  joined the service of the      Bank  on  or  before  1-4-1981  are      eligible to  be considered  for the      promotion process.      2. MODALITIES :-        -----------      a) Seniority - 34 marks ( 0.75                     mark for each                     completed month of                     service over and                     above the minimum                     qualifying service)      b)Qualif-        ications   -  10  marks  (Minimum                     qualification                     applicable  to   the                     cadre shall  not  be                     reckoned)           Post Graduation - 3 marks           Double Graduation - 1 mark           (like BL, LLB, B.ED.)           Any Diploma/s. - 2 marks           CAIIB - Part I  - 2 marks           CAIIB - Part II - 2 marks      (c) Interview - 20 marks      (d) Performance - 56 marks           All  the  eligible  candidates      will be  called for  the  interview      directly.  (Candidates   need   not      submit  any  applications  in  this      regard)." Following that process, five Branch managers were promoted - two as  Area Managers  and three as Senior managers - in the proceedings dated December 1, 1989.      Promotions made  in the  proceedings dated  December 1, 1989 were challenged before the Andhra pradesh high court by one K.V.T. Prasanna Kumar (by filing Writ Petition No. 17263 of 1989  on December  11, 1989), G. Anantha Raju, P. Sainath Reddy and  C. Vijayakumar Reddy (by filing Writ Petition No. 3546 of  1990 on  February 16, 1990). During the pendency of the said  writ petitions  P.V. Krishna  Murthy filed another Writ Petition  (writ Petition  No. 9692 of 1993) on July 13, 1993 in the High Court where he assailed the promotions made on May  3, 1988  but none  of the candidates promoted during the year  1988 to  the  posts  of  Area/Senior  Manager  was impleaded as  party respondent.  All the four Writ Petitions

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were heard  together by  a learned  single judge of the High Court who,  by his judgment dated September 7, 1993, allowed Writ Petitions Nos. 17263 and 17279 of 1989 and 3546 of 1990 and declared that the promotions made on December 1, 1989 to the post  of Area/Senior  managers form  the post  of Branch Manager in  the Rayalaseema  Grameena Bank  were illegal and improper. Writ  petition No.  9692 of  1993  filed  by  P.V. Krishna Murthy,  in which the promotions made on May 3, 1988 the 1988  were assailed,  was,  however,  dismissed  on  the ground of  laches. Against the said judgement of the learned single judge  Writ Appeals  Nos. 1242  of 1993, 1232 of 1993 and 1238  of 1993  were filed  by the  Chairman, Rayalaseema Grameena Bank,  and Writ  Appeals Nos. 1233 of 1993 and 1234 of 1993  were  filed  by  the  five  Branch  Managers  whose promotions as  Area/Senior managers made on December 1, 1989 had been  quashed by  the learned single Judge. Writ Appeals Nos. 1142  of 1993  and 1224  of 1993  were  filed  by  P.V. Krishnamurthy, the  petitioner in  Writ Petition No. 3546 of 1990 and  Writ Petition No. 9692 of 1993 and Writ Appeal No. 1210 of  1993 was  filed by  two of  the petitioners in Writ Petition No.  17279 of  1989. These  appeals related  to the promotions made on May 3, 1988.      In Writ Appeal No. 1142 of 1993 a contention was raised that the  promotions made on May 3, 1988 had been questioned in Writ  Petition No. 17263 of 1989. The said contention was rejected by  the Division Bench of the High Court and it was observed that the prayer in the said writ petition was clear and categorical  and no  relief was sought for in respect of the promotions  made on May 3, 1988. In Writ Appeal No. 1210 of 1993  an application  was made  seeking amendment  of the prayer in  Writ Petition  No. 17279 of 1989 to challenge the promotions made  on May 3, 1988 but the said application was rejected by  the learned judges on the Division Bench of the High  Court.   As  regards  challenge  to  the  validity  of promotions made  on May 3, 1988 the learned judges held that Writ petition  No. 9692 of 1993 had been filed after a lapse of about  four years  after the  promotions were effected in the year  1988 and  the conduct  of the  writ petitioners in keeping quiet  and submitting  themselves to  the promotions process undertaken  by the  Bank for filling up the posts in the 1989  disentitled them  to seek  relief  in  respect  of promotions made in the year 1988 inasmuch as some rights and accrued in  favour of  the employees promoted on May 3, 1988 and if  their promotions  were to be set aside subsequent to the promotions  made on December 1, 1989 it would cause them irreparable loss.  The learned  judges on the Division bench of the  High Court,  therefore, dismissed  Writ Appeal  Nos. 1142 of  1993, 1224  of 1993 and 1210 of 1993. Civil Appeals Nos. 3804-3808  of 1996 have been filed against that part of the judgment  of the  High Court  relating to the promotions made on May 3, 1988.      The learned counsel for the appellants in these appeals has submitted  that now  the appellants do not challenge the promotions that  were made  on May  3, 1988  since they have also been promoted as Area/Senior managers and they are only raising the  question regrading  restoration of the inter se seniority of the appellants and the promoted officers on the post of  Area/Senior Manager.  We do  not find  any merit in this  contention.  since  there  was  no  challenge  to  the promotions made  on May  3, 1988  till  1993,  the  promoted officers had  been working for nearly five years by then and had acquired  right  to  seniority  on  the  basis  of  such promotion and they cannot be deprived of the said right. The High court,  in our  opinion,  has  rightly  held  that  the belated challenge  to the  promotions made  on May  3,  1988

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raised  by   the  appellants  in  these  appeals  cannot  be entertained. Civil  Appeals  Nos.  3804-3808  of  1996  are, therefore, liable to be dismissed.      Writ Appeals  Nos. 1242  of 1993, 1232 of 1993 and 1238 of 1993  filed filed  by the  Rayalaseema Grameena  Bank and Writ appeals Nos. 1233 of 1993 and 1234 of 1993 filed by the five  Branch  managers  who  were  promoted  as  Area/Senior Managers on  the basis of proceedings dated December 1, 1989 were dismissed  by the  Division bench  of the High Court on the view  that the  Bank had considered the cases of all the eligible officers  for promotion to the posts of Area/Senior Managers and  only those who secured highest number of marks amongst them  were ultimately  promoted and that this method of selection is contrary to the principle of ’seniority-cum- merit’. Civil  Appeals No. 3799-3803 of 1996 have been filed by the  Rayalaseema Grameena  Bank, while Civil appeals Nos. 3811-3812 of  1996 have  been filed  by five Branch managers who have  been  promoted  as  Area/Senior  managers  in  the proceeding on  December 1,  1989 against  this part  of  the judgment of the High Court.      Having heard  the learned  counsel for  the Rayalaseema Grameena bank  as well  as five branch Managers who had been promoted as  Area/Senior  Managers  in  the  proceedings  on December 1,  1989, we  find that  no case  is made  out  for interference with  the said  view of  the  High  Court.  The promotion process laid down by the Rayalaseema Grameena Bank in its  circular dated  September 27,  1989, on the basis of which the  selection for promotion had been made on December 1, 1989,  sets apart  34 marks  for seniority,  10 marks for qualifications, 20  marks for  interview and  56  marks  for performance which  shows that  out of  a total number of 120 marks the  maximum number of marks that could be awarded for seniority is  34 and that 0.75 mark was to be given for each completed  moth  of  service  over  and  above  the  minimum qualifying service.  In  other  words,  if  two  person  are appointed on  the same  day, the same number of marks had to be awarded  for seniority. Moreover out of a total number of 120 marks  more than  50% marks were set apart for interview and performance.  The High  Court has  found that only those officers who  had secured  the highest  number of marks were ultimately promoted.    It  is  not  a  case  where  minimum qualifying  marks   are   prescribed   for   assessment   of performance and  merit and  those who  secure the prescribed minimum qualifying  marks are  selected for promotion on the basis of  seniority. In  the circumstances,  it must be held that the  High Court has rightly come to the conclusion that the mode of selection that was in fact employed was contrary to the  principle of  ’seniority-cum-merit’ laid down in the Rules. Civil  Appeals No.  3799-3803 of  1996 filed  by  the Rayalaseema Grameena  Bank as  well as  Civil  Appeals  Nos. 3799-3803 of  1996 filed by the Rayalaseema Grameena Bank as well as  Civil Appeals  Nos 3811-2812  of 1996  filed by the promoted officers are, therefore , liable to be dismissed.      PINAKINI GRAMEENA  BANK :-  On February  19,  1992  the Board of  Directors of the Pinakini Grameena Bank decided to create two  posts of  Area Managers and four posts of senior Managers. The  Board formulated  the  promotion  policy  and communicated it to all the branches through its circular No. 37/PSD/13/92 dated  March  16,  1992  which  laid  down  the following promotion process :-      "  ELIGIBILITY   :   The   officers      (managers)  who  have  completed  8      years of  service as  on 31.03.1992      are eligible  for  considering  the      promotion  to  Area/Senior  Manager

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    posts.      WEIGHTAGE OF MARKS :      -------------------      (a)  Seniority       : 55 marks           Officers (Mana-           gers) who have           completed 8 ye-           ars of service           as per SSR of            the Bank.      (b)  For passing           CAIIB Part- I  : 2 marks           CAIIB Part -II   3 marks      (c) performance     : 25 marks      (d) Interview       : 15 marks                     Total  100 marks      Further, we  observe that  many  of      the Officers  (Managers)  have  not      submitted      the      performance      appraisals for the years 1989, 1990      and   1991    to    assess    their      performance.  Such   officers   are      advised to  submit the  performance      appraisals so  as to reach HO : PSD      on or before 31.03.1992. Otherwise,      we will  be constrained  to  assess      their  performance   based  on   he      information available with us.      A Committee  is constituted for the      purpose of  conduction interview as      per Government of India guidelines.      The  dates  of  interview  will  be      intimated   to    the    candidates      individually, in due course."      In the  proceeding held  on April  20, 1992 five Branch Managers were promoted as Area/Senior Managers. Three Branch Managers, namely,  K. Addanki  Babu, P. Raghava Rao and V.C. Krishna Prasad  filed writ  Petition No.  5204  of  1992  in Andhra Pradesh  High Court wherein they challenged the order dated April  20, 1992  regarding the  promotion of  the said five branch  Managers as Area/Senior Managers. The said writ Petition was  allowed by  the learned  single judge  by  his judgment dated  December 17,  1993 wherein  he followed  the earlier  judgement   of  the   learned  single  judge  dated September 7,  1993 given  in the  Writ Petitions relating to the Rayala Seema Grameena Bank . Writ Appeal No. 417 of 1994 was filed  by the  Pinakini Grameena Bank, while Writ Appeal No. 422  of 1994  was filed  by the  promoted officers whose promotion were  set aside  by the  judgment of  the  learned single judge.  Both these appeals have been dismissed by the Division Bench  of the  High Court.  The learned Judges have pointed out  that the  cases of  all officers  eligible  for promotions  to   the  posts  of  Area/Senior  Managers  were considered and  only those  who secured  highest  number  of marks amongst  them were  ultimately promoted  and that this method  of   selection  is  contrary  to  the  principle  of ’seniority-cum-merit’. Civil  Appeal Nos.  3809-3810 of 1996 have been filed by the Chairman, the Pinakini Grameena Bank, while Civil  Appeal No.  3798 of  1996 has  been filed by he promoted officers  against that  part of the judgment of the High Court.      Form the  circular dated  March 16,1992 laying down the promotion process  it is  evident that  selection was  to be made on  the basis  of marks  to  be  awarded  by  selection committee and  that out  of total  number of  100 marks,  55

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marks were  to be  awarded for seniority while 25 marks were assigned for  performance and  15 marks for interview. There was no  indication in  the said  circular as to how 55 marks for seniority  were to  be given  to the Branch Managers who were eligible  for consideration  for promotion on March 31, 1992. The said circular did not prescribe minimum qualifying marks for  assessment of  performance and merit on the basis of which  an officer  would be considered for being selected and, as  pointed out  by the  High Court,  the selection was made of  only those  officers who  secured highest number of marks amongst  the eligible  officers. In the circumstances, the High  Court, in  our view,  has rightly  held that  this method  of  selection  was  contrary  to  the  principle  of ’seniority-cum-merit’  and   it  virtually  amounts  to  the application of the principle of ’seniority-cum-merit’ and it virtually amounts  to the  application of  the principle  of ’merit-cum-seniority’. We,  therefore, do not find any merit in Civil  Appeal Nos. 3809-3810 of 1996 and 3798 of 1996 and the same are also liable to be dismissed.      We would  now take  up  the  Madhya  Pradesh  group  of appeals of  appeals which  relate to  three  banks,  namely, Baster Kshetriya  Gramin Bank,  Rewa Sidhi  Gramin Bank  and chhindwara-Seoni Kshetriya Gramin Bank. The appeals relating to these banks are also being dealt with separately.      Baster Kshetriya  Gramin Bank:  - Selection process for the purpose  of promotion to the post of Area Manager/Senior Manager in the Baster Kshetriya Gramin Bank was contained in the circular  dated February  16, 1993  . The said selection was made  on the  basis of  interview of  all  the  eligible officers by  the Staff  Selection Committee as per the Rules and a  select list  of five  persons was prepared and on the basis of the said select list promotions were made. The said promotions were  challenged by  three officers  who,  though senior, were  no promoted,  by filing  Writ Petition Nos. 43 and 45  of   1993 in the Madhya Pradesh High court. The said Writ Petitions  were allowed  by the learned single judge by judgment dated  July 24,  1996 on  the view that where Rules prescribed promotion  on the  basis of ’seniority-cum-merit’ the seniority  has to be give due place and merely because a person has  a better  merit, he  cannot be promoted over and above  the   person  senior   to  him  unless  he  lacks  in qualification or  is other  wise found  to be  unfit,  i.e., there is  nothing against  him, and  that this  was not  the position in  the  instant  case  and  that  the  concept  of seniority had  been given  no weightage in this case Letters patent Appeals  (L.P.A. Nos.  150 and  152  of  1996)  filed against the  said judgment  of the learned single judge were dismissed by  the Division  bench of  the High  Court by the impugned judgment  dated October 9, 1996. The learned judges on the  Divisions Bench  have found  that the Bank has given weightage to  merit first and second place has been given to seniority and  that this  shows that the Selection committee has acted  contrary to  the principles  prescribed under the Rules and  that the  selections be made by way of merit-cum- seniority and  not by way of seniority-cum-merit as required by the  Rules. Civil  Appeals arising  out of  Special Leave Petition (C)  No. 17780-81  of 1997  have been filed against the said judgment of the High Court by the promoted officers whose promotion has been quashed by the High Court.      We have  heard the  learned counsel for the appellants. It is  not disputed that the selection was mad eon the basis of marks assigned on the basis of interview by the Selection Committee and  those who  secured  the  highest  marks  were selected. The  selection process  adopted for the purpose of promotion to  the post  of Area  Manager/Senior managers was

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thus not  in consonance with the principle of ’Seniority-cum -merit’ and  the promotions were not made in accordance with the Rules.  Civil  Appeals  arising  out  of  Special  Leave Petition (C)  No. 17780-81  of 1997 are, therefore liable to be dismissed.      Rewa Sidhi  Gramin Bank  : -  On February  2, 1989  the Chairman of  the Rewa Sidhi Gramin Bank issued the promotion policy for  promotion of  Field Supervisors  and Officers of the bank  to the  higher posts. In paragraph 2.3 of the said policy it  was prescribed  that promotion  from ’officer  to Area/Senior Manager,  subject  to  satisfaction  of  minimum period of  service, shall  be, at  present, on  the basis of assessment of  his overall  performance based  on  appraisal reports on  hm  and  his  potentiality  to  shoulder  higher responsibilities   assessed    in   the    interview,   duly supplemented    by    weightages    for    seniority,    job responsibility, placement/posting/mobility".  With regard to promotion from  Officer to Area/Senior Manager the following promotion criteria were laid down: "----------------------------------------------------------- Promotion         percentage Wightage                ---------------------------------------------                Seniority Job resp   Placement/ Perfor- Inter                         onsibility  posting/  mance   view                                      mobility ------------------------------------------------------------ Officer Area/Senior      15      12            8       40      25 Manager ------------------------------------------------------------ As regards  weightage  for  seniority  it  was  provided  in Paragraph 2.4  that one  mark for  each  completed  year  of service in  the respective  cadre/post, subject to a maximum of  15  marks  in  respect  of  promotion  from  Officer  to Area/Senior Manager would be give. It was further:-      " 2.9.  Candidates who have secured      less than  40% marks  in  interview      will   not    be   considered   for      promotion and  their names will not      be  included  in  the  final  merit      list.      2.10  .  This  list  of  successful      candidates in  the order  of  total      marks obtained  will be  placed  by      the   Staff   selection   committee      before the  Board, duly recommended      for consideration  for  appointment      or promotion."      (emphasis supplied)      On bench  of the  High Court  has followed  its earlier judgment dated  July 4, 1994 in L.P.A. No. 120 of 1997 which judgment was  based on the earlier judgment dated October 9, 1996 passed  in L.P.A.  No. 151  of 1996 and other connected matters. Civil Appeals arising out of Special Leave Petition (C) Nos.  17780-81 of  1997 filed against the judgment dated October 9,  1996 have  been dismissed. For the same reasons, Civil Appeals arising out of Special Leave Petition (C) Nos. 19965-19966 of 1997 are also liable to be dismissed inasmuch as according  to the promotion policy dated February 2, 1989 selection was  made on  the basis  of total  number of marks obtained by  the eligible  candidates. The  Criterion of the promotion policy  cannot be  regarded as being in consonance with the  principle of  ’seniority-cum-merit’ as  prescribed under the  Rules. Civil  Appeal arising out of Special Leave Petition  (C)  Nos.  19965-19966  of  1997  are,  therefore,

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dismissed.      Chhindwara -  Seoni Kshetriy  Gramin Bank  :  By  order dated April  8, 1993  promotions were  made to  the post  of Area/Senior Manager  in the  Chhindwara  -  Seoni  Kshetriya Gramin Bank  on the  basis of  the recommendations made by a selection Committee.  The said  recommendations were made on the basis of marks awarded after interview and assessment of the performance  of the  candidates eligible  for promotion. The  said  promotions  were  challenged  before  the  Madhya Pradesh High  court by filing a Writ Petition (M.P. No. 1931 of 1993)  which has been allowed by the learned single judge by his  judgment dated  February 7,  1997  in  view  of  the earlier judgment  dated July 24, 1996 passed in M.P. No. 943 of 1993.  The said judgment was based on the judgment of the Division Bench  of the High Court in L.P.A. No. 151 of 1996. Civil Appeal  arising out  of Special Leave Petition (C) No. 7321 of  1997 has been filed by one of the promoted officers against the said judgment of the learned single judge of the High Court.      During the  course of hearing of the appeal the learned counsel for  the respondent  - Bank has placed before us the relevant documents  relating to  the impugned  selection and promotion. On  a perusal  of the said documents we find that 50 marks  out of  the total  of 100 marks were prescribed as the minimum  qualifying marks  for interview  and only those who had  obtained the  qualifying marks  in  interview  were selected for  promotion on  the basis  of seniority. it was, therefore, a  case where  a minimum  standard was prescribed for assessing  the merit  of the  candidates and  those  who fulfilled  the  said  minimum  standard  were  selected  for promotion on  the basis  of seniority. In the circumstances, it cannot  be said  that the  selection has not been made in accordance with  the principle  of ’seniority-cum-merit’. We are, therefore,  unable to  uphold the  impugned judgment of the High  Court. The  appeal  has  to  be  allowed  and  the impugned judgment  of the  High Court dated February 7, 1997 passed by  the learned single Judge of the High Court has to be set aside and the promotion  of the appellant on the post of Area/Senior  Manager under  order dated April 8, 1993 has to be affirmed.      In the  result, Civil  Appeal Nos.  3798 of 1996, 3809- 3810 of  1996, 3799-3803  of 1996,  3811-3812 of 1996, 3804- 3808 of  1996 and Civil Appeals arising out of Special Leave Petition (C)  Nos. 177/0-17781  of 1997  and 19965-19966  of 1997 are dismissed. Civil Appeal  arising out  of Special Leave Petition (C) No. 7321 of  1997 is  allowed and  the judgment  of  the  Madhya Pradesh High  Court dated  February 7, 1997 in M.P. No. 1931 of  1993  is  set  aside  and  the  said  writ  petition  is dismissed. No order as to costs.