LPA No.570 of 2009 1. DIWAKAR PRASAD, Son of Dwarika Prasad, resident Suryodaya Dakhli Ghat Road, Mohalla-Khandak Par, P.O. & P.S.-Bihar Sharif, District-Nalanda. 2. Arun Kumar Singh, Son of Shri Chandradeo Singh, Resident of Deepa Bhawan, Near Buddha Dental College, P.S.-Patrakar Nagar, District-Patna. 3. Dinesh Prasad Sinha, Son of Late Ram Sharan Prasad Sinha, Resident of Tetariya, P.O.-Barai, P.S.-Islampur, District-Nalanda. 4. Mahesh Prasad, son of shri Bajo Prasad, Resident of Village-Kakaila, P.O.-Mirchaiganj, P.S. & District-Nalanda. 5. Subhash Chandra Sinha, Son of Late Bhojal Prasad, Resident of Kamrudinganj, P.O. & P.S.- Bihar Sharif, District-Nalanda. 6. Suresh Prasad, Son of Shri Narayan Prasad, Resident of Mohalla Manpur Surahi Tola, P.O.- Buniyadganj, P.S.-Gaya Mufassil, District-Gaya. 7. Rajendra Singh, Son of Late Sheo Govind Singh, Resident of Village-Chhapra, P.O.-Akorhi, P.S.- Akorhi Gola, District-Rohtas. 8. Bishnu Prasad Sah, son of Shri Maheshwar Prasad Sah, C/o C.M. Singh, Udantpuri Mohalla-Garh Par, P.O. & P.S.-Bihar Sharif, District-Nalanda. ……..Petitioners-Appellant (1st Set). Versus 1. NALANDA GRAMIN BANK having its Head Office at Bihar Sharif (now Madhya Bihar Gramin Bank having its Head Office at Mina Plaza, south of Patna Museum, Patna). 2. The Chairman, Nalanda Gramin Bank, Bihar Sharif (now the Chairman Madhya Bihar Gramin Bank, Meena Plaza, south of Patna Museum, Patna). 3. Senior Manager, Personnel, Nalanda Gramin Bank, Head Office, Bihar Sharif (Nalanda) (now Senior Manager, Personnel, Madhya Bihar Gramin Bank, Patna). 4. The Madhya Bihar Gramin Bank through its Chairman, having its Head Office at Meena Plaza, South of Patna Museum, Buddha Marg, Patna. ………..Respondents-Respondents (1st Set). ----------- For the Petitioner : Sri Abhinav Srivastava, Adv. For the Bank : Sri Sunil Kumar Singh, No. 1 : Sri Rakesh Kumar Ranjan, Adv. For the Intervenors: Sri Ajay Bihari Sinha,Adv. ----------- - 2 - P R E S E N T HON’BLE THE CHIEF JUSTICE & HON’BLE JUSTICE SMT. ANJANA PRAKASH O R D E R We have heard learned counsel for the Appellants, Counsel for Madhya Bihar Gramin Bank previously known as Nalanda Gramin Bank which is a Regional Rural Bank having Punjab National Bank as its sponsor/lead bank, at length, on the issue whether Old/New Rules would apply to the Appellants in promotion to Scale II post of Area/Sr. Manager. The learned Single Judge by an order dated 31.03.2009 turned down their prayer to be governed by Old Rules considering that the proposal for up-gradation of the branches in which the Appellants were working had been rejected on 16.12.1998 by the Board, therefore no vacancy arose during the existence of the Old Rules - 3 - hence there was no question of the Appellants being governed by the Old Rules. Tracing the history of the case it appears that the Appellants were selected for posts in officer cadre through a competitive examination conducted in the years 1982-83 by the respondent-bank. On 28.09.1988 the Banking Division, Department of Economic Affairs framed rules R.R.B. (Appointment and Promotion) Rules 1988 for appointment and promotion of officers and other employees in the Rural Banks (hereinafter called the Old Rules). However on 29.07.1998 New Promotion Rules were framed making a major departure from Old Rules in the procedure of promotion to Scale-II officers in the posts of Area/Sr. Manager by introducing the system of written test and interview instead of seniority-cum-merit (hereinafter called the New Rules). - 4 - This led to a number of controversies in various Rural Banks all over the country since the issue of application of Old/New Rules was inextricably linked with up-gradation of the bank and resultant vacancies created on account of such up- gradation which in turn was dependent on the financial figures arrived at as on 31.03.1998. It is not necessary to go into the minute details of the letters from the Rural Banks to the lead bank i.e. Punjab National Bank seeking clarification on this issue. Suffice is to say vide Annexure-6 to the writ petition the lead Bank i.e. Punjab National Bank on 14.12.1999 had concluded that the relevant date for consideration was to be the date on which posts in Scale II were created/sanctioned by the Board. It appears from the records that the appellants’ Bank figures did not at first find favour with the - 5 - Board and the proposal for up- gradation from small to medium Branch was turned down on 16.12.1998 (Annexure-A to the counter-affidavit in the original writ application) with an observation to submit fresh proposal after March 1999 incorporating the figures of deposits and advances for the financial year ending 1999 for a fresh consideration. If the matter had ended here there would be no scope for controversy and this Court would have had no alternative but to turn down the prayer of the Appellants that they be governed by the Old Rules on the ground that since the branch was not upgraded resultantly no vacancy had arisen during the existence of the Old Rules and before the New Rules came into force on 29.07.1998. But it is what followed thereafter that makes the case of the present appellants sustainable and - 6 - worth consideration. On 10.12.1999 the Board comprising of senior officials including Chairman of the Punjab National Bank, RBI and NABARD took a decision (Annexure-A to the counter- affidavit in the present LPA) that 18 branches of Rural Banks (including where Appellants were working) within the Punjab National Bank were approved for up-gradation from small to middle branch-main branch and further stated that the promotion procedure in these branches could be initiated. However, this meeting did not specify any date as to from what date the said banks were to be considered upgraded. Subsequent to this on 20.04.2000 (Annexure-B to the counter-affidavit in the LPA) a fresh meeting of the board was held in which once again senior officials of the Punjab National Bank and NABARD participated and they by resolution 9 decided to upgrade the said 18 branches on the - 7 - NABARD norms dated 10.03.1993 with effect from 13.3.1998 further clarifying that the 18 posts of Area/Sr. Manager created for promotion on account of such up-gradation would be for 13 branches as per old promotion policy and for five branches as per the new promotion policy. Needless to say that this Resolution of the Board was binding on all the concerned. The counsel for the bank has attempted to clarify that the Board has exceeded its power by upgrading the bank and consequent creation of promotional posts with effect from 31.3.1998 even though the said branches did not conform to its requirement as per the NABARD circular dated 20.03.1993 or its modification dated 15.7.1998. However, we are unable to accept this proposition since undisputedly the Board had the authority to take decisions in such matters and possibly the figures which - 8 - have been demonstrated (vide Annexures 2 and B in the original writ petition) meet the requirements of the NABARD circular dated 20.03.1993 (Annexure C in LPA). However, we are not required to sit in appeal over the decision of the Board at this late stage and once the Board had taken a decision that the Banks stood upgraded with effect from 13.3.1998 and thus vacancies arose from the said date there is no scope for further arguments since the same has remained unchallenged. Once it is accepted that the vacancies arose on 31.3.1998 the only deduction that can be arrived at is that the Old Rules would apply as was decided vide Annexure-6. In fact, subsequent to this decision one of the officers, Dinesh Sharma was given the benefit of promotion adopting the Old Rules on 07.10.1998. The Hon’ble Supreme Court also ending a similar controversy in Arjun - 9 - Singh Rathore and Ors Vs. B.N. Chaturvedi and Ors 2008 (2) SLJ 230 (SC) had followed an earlier decision in the case of Y.V. Rangaiah v. J. Sreenivasa Rao and in Para 6 reproduced the ration as quoted below:- This Court has specifically laid (sic) that the vacancies which occurred prior to the amendment of the Rules would be governed by the original Rules and not by the amended Ruled. Accordingly, this Court had held that the posts which fell vacant prior to the amendment of the Rules would be governed by the original Rules and not the amended Rules. As a necessary corollary, the vacancies that arose subsequent to the amendment of the Rules are required to be filled in in accordance with the law existing as on the date when the vacancies arose. Under the circumstances, we set aside the order of the learned Single Judge passed in C.W.J.C. No. 11692 of 2002 on 31.03.2009 and consequently - 10 - allow the appeal for the reasons stated above. There shall be no order as to costs. Patna High Court, Patna Dated the 16 September, 2009 NAFR/ Vikash. (P.K. Misra, CJ.) (Anjana Prakash, J.)