Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1786 OF 2002

Rupa Rani Rakshit & Ors. … Appellants

Vs.

Jharkhand Gramin Bank & Ors. … Respondents

WITH

CA Nos.1787-1788 & 1789 of 2002

J U D G M E N T

R.V.RAVEENDRAN, J.

The appellants in these appeals are the employees of  

the first respondent-Bank – Ranchi Kshetriya Gramin Bank  

– now known as Jharkhand Gramin Bank. The appellants were  

working  as  clerks-cum-cashiers  or  equivalent  posts  in  

different  branches  of  the  first  respondent-Bank.  The  

Regional  Rural  Banks  (Appointment  and  Promotion  of  

Officers and other Employees) Rules, 1988 (for short ‘the  

Rules’) made by the Central Government in exercise of  

powers conferred under the Provincial Rural Banks Act,

1976 governed the appointment and promotion of employees  

of the Bank. Rule 5 provided that all vacancies shall be  

filled in accordance with the provisions of the Second  

Schedule to the Rules. Entry (5) of Second Schedule to  

the  Rules  related  to  filling  of  posts  of  Field  

Supervisors  (subsequently  merged  with  the  post  of  

officers). Clause (a) thereof provided that 50% of the  

posts  shall  be  filled  by  promotion  from  amongst  the  

confirmed  senior  and  junior  clerks-cum-cashiers  or  

clerks-cum-typists or stenographers or steno-typists on  

the basis of seniority-cum-merit (the remaining 50% to be  

filled by direct recruitment which is not relevant for  

these appeals). Clause (b) of Entry (5)  prescribed the  

educational qualifications and the eligibility (minimum  

number  of  years  of  service  in  the  feeder  post)  for  

promotion. Clause (e) of Entry (5) prescribed the mode of  

selection for promotion as “interviews and assessment of  

performance reports for preceding three years period”.  

2. The first respondent Bank drew up a common seniority  

list  of  all  the  eligible  candidates  (candidates  

possessing the prescribed educational qualifications who  

have put in the prescribed period of service)  from the  

feeder  grades.  Then  the  eligible  candidates  were  

subjected  to  a  comparative  assessment  based  on  marks  

secured with reference to four parameters adopted by the  

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Board of Directors of the first respondent-Bank at its  

58th Meeting, on the basis of the norms prescribed by the  

National Bank for Agricultural and Rural Development (for  

short ‘NABARD’).  The four parameters and maximum marks  

allocated to each of them were as under:

Sl.N o.

Particulars Maximum  Marks

(i) Seniority  (one mark for each completed quarter of  service)

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(ii) Educational Qualifications : [for possessing graduate degree : 3 marks;  post-graduate  degree  :  2  marks  and  Doctorate : 1 mark]

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(iii )

Performance-appraisal : [for Very Good (A) - 8 marks; for Good (B)  - 6 marks; for Average (C) - 5 marks; and  for Poor (D) -  0 marks]

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(iv) Interview : [Minimum qualifying marks for interview :  10 marks]

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TOTAL 100

A  list  of  the  candidates  who  secured  the  minimum  

qualifying marks in the interview was prepared in the  

order of merit with reference to the marks secured by  

them on such assessment. Therefore, 31 candidates were  

promoted from among the said list of clerical cadre to  

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the post of Field Supervisors in the order of merit, vide  

notification dated 20.11.1990.  

3. Feeling aggrieved, the third respondent herein filed  

a writ petition before the High Court, contending that in  

making the promotions, the Bank had ignored the principle  

of seniority-cum-merit prescribed under the Rules and had  

followed  the  principle  of  merit-cum-seniority.  It  was  

also contended that contrary to the provisions of the  

Rules which required that the mode of selection would be  

only by interviews and assessment of performance reports  

for  preceding  three  years,  the  Bank  had  adopted  the  

method of assessment with reference to four parameters,  

that  is,  years  of  service  (seniority),  educational  

qualifications, in addition to performance appraisal and  

interview.

4. By  the  time  the  said  writ  petition  came  up  for  

consideration, a Full Bench of the Patna High Court had  

rendered its judgment in Ranchi Kshetriya Gramin Bank vs.  

D.P. Singh [2000 (1) PLJR 251], holding that promotion of  

persons with reference to merit, that is, promoting those  

who  secured  highest  marks  in  the  list  of  eligible  

candidates was contrary to the principle of seniority-

cum-merit.  A  learned  Single  Judge  of  the  High  Court,  

therefore,  allowed  the  writ  petition  field  by  third  

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respondent, by order dated 10.1.2001 and set aside the  

promotions. He held that the promotions effected as per  

the  order  dated  20.11.1990  without  following  the  

principle  of  seniority-cum-merit,  but  on  a  comparative  

assessment of merit which was based on marks for academic  

qualifications,  interview  etc.  were  illegal.  

Consequently, he directed as follows :

“While considering the cases all the eligible  candidates, it shall be open to the respondent  to fix marks for assessment of performance of  proceeding three  years prior to the date such  promotion as were considered originally. This  clearly means the three proceeding years from  the date of original consideration which was  the subject matter of the writ application. It  shall be open to the Bank to allocate marks at  the minimum level for the interview/viva voce  test in addition to assessment of performance,  to determine the standard of candidate in the  interest of administration. Once it is done,  seniority  shall  have  precedence  over  everything else.

x x x x x

Till order of promotion is issued based on the  aforesaid directions the respondents No.3 to 7  and the intervener(s) will continue to hold  the post(s) as presently held by them and not  to be disturbed till the final order(s) are  passed  in  the  matter  of  promotion.  If,  however,  any  contesting  respondent(s)  or  intervener(s)  or  one  or  other  fail  to  get  promotion they shall be deemed to be reverted  to the post as originally held by them before  issuance of the impugned order of promotion,  which has been set aside.

It  is  also  made  clear  that  contesting  respondents no.3 to 7 or the interveners if  allowed promotion on such consideration, they  will not get benefit in pursuance of earlier  

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notification dated 19th Nov. 1990, which has  been set aside by this Court.”     

The appeals filed by the appellants (candidates promoted  

on 20.11.1990) against the said judgment were dismissed  

by the Division Bench, holding by a short order that the  

judgment of the learned Single Judge did not call for  

interference. The said judgment is challenged in these  

appeals by special leave.

5. The first contention urged by the appellants is that  

the promotions made on dated 20.11.1990 were lawful and  

valid.  It  was  submitted  that  the  Bank  had  effected  

promotions by giving primacy to seniority as it allotted  

maximum marks of 40 out of 100, for the period of service  

(at the rate of one mark for every quarter of service).  

It  was  pointed  out  that  marks  allotted  to  other  

parameters were less - 30 marks for interview, 24 marks  

for  performance-appraisal  in  regard  to  three  years  

service and 6 marks for educational qualifications. It  

was contended that when primacy was accorded to seniority  

(period  of  service)  in  the  assessment  process,  the  

promotion  should  be  treated  as  on  the  principle  of  

seniority-cum-merit.  

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6. The  principle  of  seniority-cum-merit  is  well-

settled. In  Rajendra Kumar Srivastava & Ors. v. Samyut  

Kshetriya  Gramin  Bank  &  Ors.  [C.A.  No.6691  of  2001  

decided on 17.11.2009], this Court observed as follows :  

“8. It is also well settled that the principle  of  seniority-cum-merit,  for  promotion,  is  different  from  the  principle  of  ‘seniority’  and principle of ‘merit-cum-seniority’. Where  promotion is on the basis of seniority alone,  merit will not play any part at all. But where  promotion is on the principle of seniority- cum-merit,  promotion  is  not  automatic  with  reference to seniority alone. Merit will also  play a significant role. The standard method  of seniority-cum-merit is to subject all the  eligible  candidates  in  the  feeder  grade  (possessing  the  prescribed  educational  qualification  and  period  of  service)  to  a  process of assessment of a specified minimum  necessary  merit  and  then  promote  the  candidates  who  are  found  to  possess  the  minimum necessary merit strictly in the order  of seniority. The minimum merit necessary for  the post may be assessed either by subjecting  the candidates to a written examination or an  interview  or  by  assessment  of  their  work  performance during the previous years, or by a  combination of either two or all the three of  the aforesaid methods. There is no hard and  fast rule as to how the minimum merit is to be  ascertained.  So  long  as  the  ultimate  promotions are based on seniority, any process  for ascertaining the minimum necessary merit,  as  a  basic  requirement,  will  not  militate  against the principle of seniority-cum-merit.  

x x x x x

10. Thus it is clear that a process whereby  eligible  candidates  possessing  the  minimum  necessary merit in the feeder posts is first  ascertained  and  thereafter,  promotions  are  made  strictly  in  accordance  with  seniority,  from  among  those  who  possess  the  minimum  necessary merit is recognised and accepted as  complying  with  the  principle  of  ‘seniority-

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cum-merit’.  What  would  offend  the  rule  of  seniority-cum-merit is a process where after  assessing  the  minimum  necessary  merit,  promotions  are  made  on  the  basis  of  merit  (instead  of  seniority)  from  among  the  candidates  possessing  the  minimum  necessary  merit. If the criteria adopted for assessment  of minimum necessary merit is bona fide and  not unreasonable, it is not open to challenge,  as  being  opposed  to  the  principle  of  seniority-cum-merit. We accordingly hold that  prescribing  minimum  qualifying  marks  to  ascertain  the  minimum  merit  necessary  for  discharging the functions of the higher post,  is not violative of the concept of promotion  by seniority-cum-merit.”

(emphasis supplied)

7. In this case, the bank did not subject the eligible  

candidates to any process of assessment to ascertain any  

specified minimum merit, for the purpose of promoting the  

candidates who possessed the minimum merit, on the basis  

seniority.  On  the  other  hand,  the  Bank  proceeded  to  

assess  their  inter-se-merit  with  reference  to  four  

criteria (period of service, educational qualification,  

performance  during  three  years,  and  interview)  by  

allocating respectively maximum marks of 40, 6, 24 and 30  

(out of a total 100 marks) and then proceeded to promote  

those who had secured the highest marks in the order of  

merit. Thus there were two violations of the relevant  

rules:  (i) promoting candidates on merit-cum-seniority  

and not on seniority-cum-merit; and (ii) assessing inter-

se merit, inter alia with reference to marks allocated to  

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different  educational  qualifications.  It  cannot,  

therefore, be said that the promotions made on 20.11.1990  

were  on  the  basis  of  seniority-cum-merit.  Though  the  

period  of  service  was  also  considered  as  one  of  the  

factors  for  assessment  of  comparative  merit,  the  

procedure adopted for promotion was merit-cum-seniority.  

The High Court was, therefore, justified in interfering  

with the promotions. The directions given by the High  

Court for fresh process of promotion were in consonance  

with the Rules and principles of seniority-cum-merit. The  

appeals, therefore, have no merit.

8. The appellants submitted that they were promoted in  

November 1990, that they had worked in the higher post of  

Field Superiors for more than ten years and therefore,  

even  if  there  was  some  procedural  irregularity,  their  

promotions ought not to have been interfered with, in the  

year  2001.  The  submission  is  misleading.  Though  the  

promotions of appellants were in November, 1990, it was  

challenged before the High Court by the third respondent  

by filing a writ petition, without any delay, that is, in  

less than three months. The fact that the writ petition  

was pending for a considerable time will not therefore  

create any equities in favour of the appellants.

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9. The  appellants  in  C.A.  No.1789  of  2002  have  an  

additional grievance. The three appellants in that appeal  

were  originally  promoted  on  20.11.1990.  When  the  High  

Court set aside the said promotions and directed a fresh  

process  of  promotions  by  adopting  the  principle  of  

seniority-cum-merit,  the  Bank  accordingly  made  fresh  

promotions  by  order  dated  24.4.2001  and  these  three  

appellants were again promoted with effect from 9.4.2001.  

But their seniority in the post of Field Supervisor was  

reckoned  from  the  date  of  their  fresh  promotion  i.e.  

9.4.2001  and  the  previous  period  of  service  as  Field  

Supervisor from 1990 to 2001 was ignored. They contend  

that their service as Field Supervisors between 1990 and  

2001  should  also  be  counted  for  the  purpose  of  their  

seniority  in  the  post  of  Field  Supervisors,  further  

promotions and other benefits.  

10. It is now well-settled that if an appointment or  

promotion is made without considering the claims of all  

the  available  eligible  candidates  and/or  without  

following  the  relevant  rules,  the  service  rendered  in  

pursuance of such illegal appointment or promotion cannot  

be  equated  to  service  rendered  in  pursuance  of  an  

appointment  or  promotion  validly  and  lawfully  made.  

Whenever a person is promoted to a post without following  

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the rules prescribed for such promotion, he should be  

treated as a person not regularly promoted to that post.  

Consequently, where promotions are governed by Rules, in  

computing the length of service, in the post to which an  

employee is promoted, it is not permissible to include  

the period of service rendered in pursuance of an illegal  

promotion  which  is  subsequently  set  aside.   It,  

therefore, follows that the period of service rendered by  

the appellants from 1990 to 2001 cannot be counted for  

the purpose of seniority in the cadre of Officers/Field  

Superiors. Therefore, the appellants in C.A. No.1789/2002  

are also not entitled to any relief.  

11. Therefore, all the appeals and the applications for  

impleadment are dismissed.

                                         …………………………J. (R. V. Raveendran)

New Delhi;    …………………………J. November  24, 2009.       (K.S. Radhakrishnan)  

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