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CASE NO.: Appeal (civil)  4593-4594 of 2002

PETITIONER: Ramrao & Ors.                                            

RESPONDENT: All India Backward Class Bank Employees Welfare Association & Ors.       

DATE OF JUDGMENT: 05/01/2004

BENCH: S.B. Sinha & Arun Kumar.

JUDGMENT: J U D G M E N T

WITH

CIVIL APPEAL NOS.4595-96 OF 2002 & 4597 OF 2002

S.B. SINHA, J :   

       Civil Appeal Nos. 4593-4594 of 2002 and 4595-4596 of 2002  have been filed by the appellants thereof (hereinafter referred to as  "Promotees") upon obtaining permission to file the Special Leave  applications against the judgment and order dated 10.8.2001 passed  by the High Court of Judicature at Bombay Bench at Aurangabad in  Writ Petition No. 255/1990.  Writ Petition No. 1551/1990 has been  filed by All India Backward Class Bank Employees Welfare  Association (hereinafter referred to as "Association") which is the   respondent No. 1 in the aforementioned appeals and the appellant in  Civil Appeal No. 4597/2002.   

FACTS:

       The Promotees are employees of Marathwada Gramin Bank  (hereinafter referred to as "Bank").

       A circular bearing No. Ho/ST/Cir NO. 35/88 (159) dated  8.11.1988 was issued by the Respondent Bank notifying the eligibility  criteria for internal promotion to the posts of Officers and Field  Supervisors.  The Board of Directors of the Bank passed a resolution  dated 10.11.1989 approving the proposal to fill in 23 posts of Officers  and 45 posts of Field Supervisors by promotion fixing the cut off date  for eligibility therefor as on 31.8.1989.  The promotions were to be  made on application of the principle of seniority-cum-merit.  Out of 45  posts of Field Supervisors, 13 including the backlog were proposed to  be reserved for Scheduled Tribe Category.  On or about 27.11.1989  the Respondent Bank issued another circular bearing No. HO/ST/Gr  No. 43/89 notifying the vacancies.   

       Writ Petition No. 255/1990 was filed by the respondent No. 1  herein questioning the cut off date of 31.8.1989 fixed by the Bank for  deciding the eligibility of its employees for promotion to the posts of  Field Supervisors and Officers.

       On 2.2.1990, the High Court passed an interim order in the said  Writ Petition in the following terms:

"Notice before admission returnable within  four weeks. Interim relief in terms of prayer  clause (C) in the meanwhile".

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       Thereafter the said interim order dated 2.2.1990 was modified  by the High Court in terms of an order dated 9.4.1990 directing that  the appointment made shall be subject to the result of the writ  petition.

       In the meantime, interview of eligible candidates was held  between 10.2.1990 to 15.2.1990.   It is contended that no eligible Scheduled Tribe candidate was  available for promotion in the vacancies reserved for Scheduled Tribe  category in the Post of Field Supervisor as on the cut off date of  31.8.1989 or even thereafter including for filling up the backlog and,  thus, the Board of Directors passed a resolution on or about  17.4.1990 for dereserving the vacancies which were reserved for  Scheduled Tribe candidates.  The said proposal was also forwarded  to the Ministry of Finance, Government of India as well as to the  Sponsor Bank and NABARD for requisite  permission stating that  there was no eligible Scheduled Tribe candidate for appointment on  the said 13 reserved posts.   

       The Ministry of Finance, Government of India approved the  proposal for dereservation of 13 vacancies which were earlier  reserved for the Scheduled Tribe candidates.  NABARD also granted  its permission for dereservation of said 13 vacancies.   

       The contention of the appellants is that by reason of such  dereservation the said vacancies became available for being filled up  by the candidates belonging to the general category.  During  pendency of the aforementioned writ petition, interview was held in  between 10.2.1990 and 15.2.1990.  The Association filed the writ  petition marked as W.P. 255 of 1990, as noticed hereinbefore, only  questioning the cut off data.  Another writ petition was filed by one  Shri Ashok which was marked as writ petition No. 1551 of 1990  questioning the cut off date as also the order of promotion.  However,  in both the writ petitions, neither the promotees nor the Union of India  or NABARD were impleaded as parties.   In the said writ petitions the  order of dereservation was also not questioned.

HIGH COURT JUDGMENT :    

       By reason of the impugned judgment, a Division Bench of the  High Court held that the cut off date fixed by the respondent Bank  was valid.  It further held that the Bank did not have any questionable  motive in fixing the said cut off date and the explanation given by it  being a plausible one could not be rejected.  The contention raised by  the Association to the effect that the said circular dated 8.11.1988  was issued for the purpose of frustrating the reservation policy did not  find favour with the High Court, as upon a perusal of the select panel,  it became explicit that the candidates from the SC categories had  been appointed.  The High Court further observed that even if in  place and stead of 31.12.1989 being the cut off date the same was to  be taken as 31.3.1990, nothing had been brought on records to show  that any Scheduled Tribe candidate would have become eligible.

       The High Court further opined that the Scheduled Tribe  candidates having been appointed sometimes in the year 1994  onwards, the requirements of six years service as set out in the rules  could not have been waived by the Bank by its impugned resolution.    It, however, came to the conclusion that reservation policy being in  issue in the said writ petition, the challenges raised therein should not  limit the scope thereof.  Keeping in view the subsequent action taken  by the Bank including the issue of dereservation and appointment of

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open category candidates to the respective posts pursuant to the  decision of dereservation, the High Court proceeded to analyse the  requirements for notifying dereservation as contained in the Brochure  and held that the Bank did not follow the requisite procedure to  undertake a fresh survey regarding the availability of the eligible  candidates from the respective categories even though such  candidates were not available on the cut off date.  It was observed :

"We, therefore, direct the bank to examine the  availability of candidates belonging to ST  category for promotion to the post of Field  Supervisor and Officer who became eligible  from 18.4.1990 to 17.4. 1991 as well as during  the next two years i.e. up to 17.4.1993 thereby  making a period of 3 years for filling in the  backlog of such reserved category  candidates, by examining the caste claims of  all such candidates including their service  record so as to fulfil the principle of seniority- cum-merit.  This shall be done within a period  of two months from today and those  scheduled tribe category candidates who are  found to be eligible, shall be given promotion  to the post of Field Supervisor and/ or officer,  as the case may be, and the open category  candidates who have been appointed against  such posts shall vacate these posts forthwith.   We clarify that while withdrawing the  appointments made in favour of the open  category candidates against reserved posts,  the candidates who joined last would go first  and the bank shall not be entitled to recover  any amount from them as they have already  worked in the higher posts.  Their pay fixation  in the lower posts shall be done as per the  rules.  The reserved category candidates, who  shall be so promoted, shall not be entitled to  claim arrears in salary, but for the purpose of  seniority in the respective grades, the date of  promotion shall be counted.

       Promotees have filed appeals upon obtaining leave of this  Court questioning the directions issued by the High Court.   Association’s appeal is against that part of the judgment wherein ’cut  off’ date fixed by the Bank has been found to be valid.

SUBMISSIONS :

       The learned counsel appearing on behalf of the Promotees  contended that the High Court committed a manifest error in passing  the impugned judgment as in the writ petitions neither they were  impleaded as parties nor the order of dereservation was in question.   

       Besides, supporting the impugned judgment, the contention of  the Association, on the other hand, is that keeping in view the fact  that 29 vacancies are existing in the Bank as the concerned  employees have either resigned, dismissed or died, the appellants as  also the Scheduled Tribe Candidates can be accommodated against  the said posts.   It was urged that although the Association itself did  not question the order of promotion, the same was done by Ashok in  his writ petition and, thus, the High Court cannot be said to have  committed an error in passing the impugned judgment.  Furthermore,  13 other writ petitions were filed by other employees of the Bank  questioning the appointment of the appellants herein which had also  been disposed of relying on or on the basis of the impugned

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judgment.   

       It was argued that the Bank was not correct in raising the  contention before the High Court that no eligible Scheduled Tribe  candidate was available for promotion to the posts of officers as on  31st December, 1985 as two persons names of whom appeared at Sl.  Nos. 67 and 87 of the Seniority List were members of Scheduled  Tribe.  It has been contended that as on today as many as 13  Scheduled Tribe candidates are available for promotion to the post of  Officers and, thus, this Court may direct the respondent Bank to  adjust the appellants as also the Scheduled Tribe candidates against  the existing vacancies. Mr. Ganpule, would further submit that the  cut-off date fixed by the Bank was arbitrary and, therefore, the same  was liable to be declared as such by the High Court.           The learned counsel appearing on behalf of the Bank, however,  has drawn our attention to the counter affidavit filed in Civil Appeal  No. 4597 of 2002 wherein inter alia it has been averred:

"iv)    That the document at the Serial No. 5  (under the heading "Extract of Seniority List as  on 31.12.1985") of the additional documents  sought to be brought on record by the  petitioners is also grossly misleading as it  suppresses the material fact known to the  petitioners that against the names of persons  at Serial No. 52 and 67 the said list  erroneously mentioned ’ST’ which error was  subsequently corrected after due notice to the  concerned persons Shri Pendalwar Shivaji  Ramanna and Shri Tehra Kiransinh  Gangusingh.  Accordingly, these persons  were called for the interview for promotion in  the year 1990 as General Category  candidates."

       It was urged that all the requisite procedures for dereservation  had been complied with and in that view of the matter the High Court  committed a manifest error in passing the impugned judgment.   

       The learned counsel would further submit that keeping in view  the present policy decision of the Bank, it is not possible to make any  further appointment adjusting the ’Promotees’ and the eligible  members of the Association and in this behalf our attention has been  drawn to the following statements made in paragraph 3 of the counter  affidavit:

"3(i)   In the instant Special Leave Petition it is  erroneously pleaded that the ST category  employees can be considered for promotions  to cadre of officers without disturbing status of  the petitioner as there are vacancies in the  officers’ cadre.  In this regard, it is respectfully  submitted that although, it is true that due to  one or the other reasons certain officers  ceased to work with the respondent bank, but  according to the Man Power Norms in  Regional Rural Banks’ introduced by the  Government of India, Ministry of Finance,  Department of Economic Affairs (Banking  Division), New Delhi, vide its Order/  Memorandum, F.No. 3/(24)/99 RRB dated  22.1.2001 and adopted by the Board of  Directors of the respondent Bank, in the

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meeting dated 18.5.2001, there is no shortfall  in manpower in the officer grade, of the  respondent Bank and, on the contrary, there  exists an excess manpower in the said grade.

ii)     It further needs to be kindly considered  by your Lordships that the accumulated losses  of the respondent bank are to the tune of Rs.  53.47 cores as on 31.3.2001.  In view of the  implementation of manpower planning norms  and in view of the accumulated losses of the  respondent Bank, it is not possible for the  respondent Bank to add manpower in officer  cadre, without getting the corresponding  number of posts vacated, inter alia, by  reversion of the petitioner."

GRANT OF PROMOTIONS :

       The respondent Bank is a Regional Rural Bank established  under the Regional Rural Banks Act, 1976 of which the Bank of  Maharashtra is the sponsor Bank.  It appears that in terms of an  award issued by the National Industrial Tribunal in 1991 which was  given retrospective effect from 1.9.1987, 23 vacancies in officers  cadre (Junior Management-I) and 45 vacancies in Field Supervisors  cadre (which have since been merged in the officers’ cadre) were  identified for being filled in by internal promotion from amongst the  eligible Field Supervisors and clerks working in the Bank.  It is also  not in dispute that promotion to the said posts are governed under the  Regional Rural Banks (Appointment & Promotion of Officers and  other Employees) Rules 1981  (The Rules).  

It is furthermore not in dispute that for the purpose of effecting  promotions to the post of Field Supervisor or Officer, the following  conditions laid down in the  Rules were required to be taken into  consideration:

"5(b)(ii)       For Promotion: Confirmed Senior Clerk-cum-Cashier with  minimum of four years service as Senior  Clerk-cum-Cashier.

OR

(b)     Six years service either as confirmed  Junior Clerk-cum-Cashier or Junior Clerk- cum-Typist or Stenographer or Steno Typist or  as a confirmed Senior or Junior Clerk-cum- Cashier, as the case may be.  For the first six  years after the year Bank, post of Field  Supervisor will be filled only by direct  recruitment and the promotion quota of these  posts will be notionally carried forward and  made good by promotions in the subsequent  years.  From the year in which the back log, if  any, in the promotion quota is wiped out, the  stipulated quota of fifty percent recruitment  from the open market and fifty percent by  promotion will be adhered to.

6(b)(ii)        For Promotions:

Confirmed Field Supervisor with a minimum of

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five years service as Field Supervisor.  The  above condition of minimum service is  relaxable as stated below:

(i)     Regional Rural Banks which have not  completed three years of existence after their  year of establishment will fill up all vacancies  in the officer cadre only by direct recruitment.

(ii)    Regional rural banks which have  completed three years of existence after the  year of their establishment but have not  completed five years, may, but only with prior  approval of National Bank, consider for  promotion confirmed Field Supervisors having  a minimum of three years experience in that  capacity.  However, if even after this  relaxation suitable candidates are not  available, the vacancies to be filled by direct  recruitment and the vacancies so filled will be  notionally carried forward to the subsequent  years till the back log, if any, is cleared.   Thereafter, the stipulated quota of fifty per  cent from open market and fifty per cent by  promotion will be adhered to".

The candidates eligible for promotion were subjected to an  interview by the Selection Committee constituted in terms of Rule  10(1)(b) of the Rules pursuant whereto and in furtherance whereof  the appointments in questions were made.

DERESERVATION  :

It appears that the respondent Bank initially reserved 8 posts of  ’officers’ for the Scheduled Tribe Candidates and 13 thereof for the  posts of ’Supervisors’.  Chapter VII of the brochure admittedly laid  down the procedure for dereservation.  Clause 7.6 provides for carry  forward of reservations whereas Clause 7.7 deals with exchange of  reservation between SC/ST and vice-versa.  Clause 7.9 provides for  reservation and carry forwarding of a single vacancy reserved for  scheduled caste or scheduled tribe candidates which may be filled up  by a general candidate, as the case may be.   

As regard difficulty in carrying out the policy of reservation it  appears that the Central Government by a letter dated 19th  September, 1989 advised the respondent Bank to approach the  Sponsor Bank for guidance and only in the event a specific issue  arises, a reference was required to be made to the Government  through the Sponsor Bank.  The Bank of Maharashtra admittedly  having been approached to give approval for the proposal of  dereservation by the respondent Bank having regard to non- availability of any Scheduled Tribe candidate for promotion by a letter  dated 18th August, 1990 granted such permission and forwarded the  proposal for final approval of the Government of India.  The NABARD  also granted approval to the proposal of dereservation by its letter  dated 31st August, 1990.  As indicated hereinbefore, the Central  Government had also approved the same.

EFFECT OF ABSENCE OF DERESERVATION AS AN ISSUE :

       Order of dereservation was admittedly not in issue before the  High Court.  In the aforementioned fact situation, we are of the  opinion that the High Court in absence of any specific challenge to

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the dereservation policy adopted by the Bank could not have gone  into the said question.  It is true that the High Court is entitled to take  into consideration the subsequent events, but the same can only be a  relevant factor for the purpose of moulding the reliefs.  But while  moulding such reliefs, the High Court could neither have considered  grant of a relief wherefor no factual foundation existed was laid in the  pleadings of the parties.

       It has been accepted at the Bar that no factual foundation was  laid down in the writ petition  before the High Court as to whether the  Bank complied the requirement of Clause 7.7 of the procedure  providing for exchange of reservation between SC/ST and vice-versa.   The question as to whether any eligible scheduled caste candidate  was available for promotion to the post of Officer or not is essentially  a question of fact.   It was, thus, not open to the High Court to advert  to the said question.

EFFECT OF ABSENCE OF THE APPELLANTS AS PARTIES :

It is true that the order of promotion was in question in Writ  Petition No. 1551 of 1990 at the instance of one Ashok but even in  the said writ petition the Promotees were not impleaded as parties.   As in the case of the Association, even in the writ petition filed by  Ashok, the order of dereservation passed by Union of India or  NABARD or the Sponsor Bank had not been questioned.  Admittedly,  Union of India or NABARD were not parties in the said writ petitions.    An order issued against a person without impleading him as a party  and, thus, without giving him an opportunity of hearing must be held  to be bad in law.  The appellants herein, keeping in view the fact that  by reason of the impugned direction the orders of promotion effected  in their favour had been directed to be withdrawn indisputably were  necessary parties.  In their absence, therefore, the writ petition could  not have been effectively adjudicated upon. In absence of the  ’Promotees’ as parties, therefore, it was not permissible for the High  Court to issue the directions by reason of the impugned judgment.   

ANALYSIS :

       It is not the contention of the Association that  procedures for  effecting promotion had not been followed.  The promotees were,  admittedly eligible for promotion and they had, thus, legally been  promoted.  The only question which was raised related to compliance  on the part of the Bank as regard the procedure of dereservation.   The High Court, therefore, was required to consider the said question  only in the event, the factual foundation therefor had been laid down  in the writ petition.  The Association did not file even any  supplementary affidavit or an application for amendment of the writ  petition praying for a relief as regard quashing of the order of  dereservation or bringing the appellants herein as parties thereto in  the writ petition.  In absence of any challenge to the order of  dereservation and in absence of the Promotees having been  impleaded as parties, the impugned directions could not have been  issued by the High Court, more so when the appellants herein had  not been given an opportunity of being heard.  Once dereservation is  made, the vacancies became available for being filled up by general  category candidates and, thus, therefor the respondent Bank was not  required to reexamine the question of availability of the Scheduled  Tribe candidates for appointment on dereserved vacancies.  The view  taken by the High Court that even after dereservation was made, the  Bank was required to reexamine the availability of ST candidates on  the dereserved vacancies, was, therefore, not correct particularly  when the High Court itself found that the cut off date being 31.8.1989

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was correctly fixed by the Bank.

CUT OFF DATE  :

       It is now well-settled that for the purpose of effecting promotion,  the employer is required to fix a date for the purpose of effecting  promotion and, thus, unless cut off date so fixed is held to be arbitrary  or unreasonable, the same cannot be set aside as offending Article  14 of the Constitution of India.  In the instant case, the cut off date so  fixed having regard to the directions contained by the National  Industrial Tribunal which had been given a retrospective effect cannot  be said to be arbitrary, irrational, whimsical or capricious.    

       The learned counsel could not point out as to how the said date  can be said to be arbitrary and, thus, violative of Article 14 of the  Constitution of India.    

       It is not in dispute that a cut-off date can be provided in terms of  the provisions of the statute or executive order.  In University Grants  Commission v. Sadhana Chaudhary & Ors., [(1996) 10 SCC 536].  It  has been observed :

"21 \005 It is settled law that the choice of a  date as a basis for classification cannot  always be dubbed as arbitrary even if no  particular reason is forthcoming for the choice  unless it is shown to be capricious or  whimsical in the circumstances.  When it is  seen that a line or a point there must be and  there is no mathematical or logical way of  fixing it precisely, the decision of the  legislature or its delegate must be accepted  unless it can be said that it is very wide off the  reasonable mark.  (See: Union of India v.  Parameswaran Match Works (1975) 1 SCC  305: (1975) 2 SCR 573 at p. 579 and Sushma  Sharma (Dr) v. State of Rajasthan (1985  Supp SCC 45 : 1985 SCC (L&S) 565: (1985)  3 SCR 243) at p. 269.)   

       If a cut-off date can be fixed, indisputably those who fall within  the purview thereof would form a separate class.  Such a  classification has a reasonable nexus with the object which the  decision of the Bank to promote its employee seeks to achieve.  Such  classifications would neither fall within the category of creating a  class within a class or an artificial classification so as to offend Article  14 of the Constitution of India.

       Whenever such a cut-off date is fixed, a question may arise as  to why a person would suffer only because he comes within the  wrong side of the cut-off date but, the fact that some persons or a  section of society would face hardship, by itself cannot be a ground  for holding that the cut-off date so fixed is ultra vires Article 14 of the  Constitution.                    In State of W.B. v. Monotosh Roy & Anr. [(1999) 2 SCC 71], it  was held : -

"13.    In All India Reserve Bank Retired  Officers’ Association v. Union of India, 1992  Supp (1) SCC 664 : 1992 SCC (L&S) 517 :  (1992) 19 ATC 856 a Bench of this Court  distinguished the judgment in Nakara, (1983)

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1 SCC 305 : 1983 SCC (L&S) 145 and  pointed out that it is for the Government to fix  a cut-off date in the case of introducing a new  pension scheme.  The Court negatived the  claim of the persons who had retired prior to  the cut-off date and had collected their retiral  benefits from the employer.  A similar view  was taken in Union of India v. P.N. Menon,  (1994) 4 SCC 68 : 1994 SCC (L&S) 860 :  (1994) 27 ATC 515.  In State of Rajasthan v.  Amrit Lal Gandhi (1997) 2 SCC 342 : 1997  SCC (L&S) 512 : JT (1997) 1 SC 421 the  ruling in P.N. Menon case (supra) was  followed and it was reiterated that in matters  of revising the pensionary benefits and even  in respect of revision of scales of pay, a cut-off  date on some rational or reasonable basis has  to be fixed for extending the benefits.

14.     In State of U.P. v. Jogendra Singh  (1998) 1 SCC 449 : 1998 SCC (L&S) 300 a  Division Bench of this Court held that  liberalized provisions introduced after an  employee’s retirement with regard to retiral  benefits  cannot be availed of by such an  employee.  In that case the employee retired  voluntarily on 12-4-1976. Later on, the  statutory rules were amended by Notification  dated 18-11-1976 granting benefit of  additional qualifying service in case of  voluntary retirement.  The Court held that the  employee was not entitled to get the benefit of  the liberalized provision which came into  existence after his retirement.  A similar ruling  was rendered in V. Kasturi v. Managing  Director, State Bank of India (1998) 8 SCC 30  : JT (1998) 7 SC 147.

15.     The present case will be governed  squarely by the last two rulings referred to  above.  We have no doubt whatever that the  first respondent is not entitled to the relief  prayed for by him in the writ petition\005 \005 \005"

       In Vice Chairman & Managing Director, A.P.S.I.D.C. Ltd. & Anr.  Vs. R. Varaprasad & Ors. [2003 (4) Supreme 245] in relation to ’cut  off’ date fixed for the purpose of implementation of  Voluntary  Retirement Scheme, it was said :         

"...The employee may continue in service in  the interregnum by virtue of clause (i) but that  cannot alter the date on which the benefits  that were due to an employee under the VRS  to be calculated.  Clause (c) itself indicates  that any increase in salary after the cut off  point/date cannot be taken into consideration  for the purpose of calculation of payments to  which an employee is entitled under the VRS."    

The High Court in its impugned judgment has arrived at a  finding of fact that the Association had failed to prove any malice on  the part of the authorities of the Bank in fixing the cut off date.  A plea  of malice as is well-known must be specifically pleaded and proved.  

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Even such a requirement has not been complied with by the writ  petitioners.          CONCLUSION :

       An upshot of the above discussions is that  the High Court  could not have issued the impugned directions in absence of the  promotees having not been impleaded as parties.  Furthermore, the  order of dereservation was not under challenge.           In these appeals, this Court is not concerned with the effect of  the orders passed by the High court in the writ petitions filed by 13  Scheduled Tribe candidates.  We must, however, notice that it has  been stated at the Bar that the said writ petitions had been disposed  of only relying on or on the basis of the impugned judgment.  What  would be the effect of the orders passed in the said writ petitions is  not a matter which we have been called upon to determine.  Suffice it,  however, to point out that in relation to the said orders also the  requisite consequences of setting aside the judgment of the High  Court must  ensue and it would be open to the High Court to pass  appropriate orders in accordance with law in appropriate  proceedings.

       Submission of Mr. Ganpule to the effect that both the appellants  and the Scheduled Tribe candidates can be adjusted in view of the  fact that 29 posts are lying vacant is also not a matter which can be  decided by this Court for the first time in these appeals.  As noticed  hereinbefore, the Bank had categorically stated that having regard to  the changed situation, they are not in a position to make any further  promotions to the post of ’officers’.  This Court, in the aforementioned  situation, cannot, thus, issue any directions upon the Bank to change  its policy decision and accommodate the Scheduled Tribe candidates  in violation of its own policy decision.  It is for the Bank, the Sponsor  Bank as also NABARD to take an appropriate decision in this matter.

       For the reasons aforementioned, the impugned judgments of  the High Court cannot be sustained which are set aside accordingly.   Civil Appeal Nos. 4593-4594 and 4595-4596 of 2002 are allowed;  whereas Civil Appeal No.4597 of 2002 is dismissed.  No costs.