IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY SIXTH DAY OF FEBRUARY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE GODA RAGHURAM WRIT PETITION NO : 18599 of 2002 Between: K.Ananda Prasad S/o.Mr. Vankatasubbarao Maharanipeta Branch, State Bank of India Visakhapatnam. ..... PETITIONER AND 1 Chairman State Bank of India, State Bank Bhavan, Corporate Centre, Madam Cama Road, Mumbai-400 021 2 The Chief General Manager, State Bank of India, Local Head Office, SBI Building, Bank Street, Kothi, Hyderabad-500 095 3 Sri P.V.Shastri, Deputy General Manager, State Bank of India, Pension Provident Fund and Gratuity Departments, Corporate Centre, State Bank of India, Madam Cama Road, Mumbai-400 021. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ, order or direction, more particularly one in the nature of a writ of mandamus a] declaring the action of the respondents 1 and 2 in not including the name of the petitioner in the Zone of consideration for promotion to the post of Senior Management Scale V in 2002 as bad in law and arbitrary b] further declare that the petitioner is fully eligible and qualified to be promoted as Senior Management Grade Scale V, duly revising the performance appraisal of the petitioner in particular for the period 1999 and 2000, as the same were down rated by the respondent No.3 purposefully. c] direct the respondents to consider the case of the petitioner for promotion to the post of Senior Management Grade Scale V along with other eligible candidates for the year 2002 and promote him if found suitable with all consequential benefits and further direct the respondents to permit the petitioner to attend the interview along with the eligible candidates for promotion to the post of Senior Management Grade /Scale V which are scheduled to be held from 25.09.2002 or any other subsequent dates. Counsel for the Petitioner: MR.D.V.SITARAMAMURTHY Counsel for the Respondent No.: MR.K.SRINIVASA MURTHY The Court made the following: Oral order: The petitioner, a Scale –IV Officer (Chief Manager) employed as such in the first respondent Bank, is aggrieved that he was denied promotion to Senior Management Grade Scale-V (for short “SMGS-V”) in 2002. He seeks revision of his performance appraisal for the period 1999 and 2000 on the ground that his performance was downgraded by the third respondent arbitrarily. He also seeks a direction to the respondents to consider him for promotion to SMGS-V in 2002 and if found suitable to accord him all consequential and incidental benefits. The petitioner initially entered service in the first respondent-bank in 1970 as a Clerk. He was thereafter taken on as a Trainee Officer in 1977; confirmed as Grade-I Officer in 1979; promoted as Scale-II Officer in August, 1984; Scale–III Officer in November, 1994 and Scale–IV Officer in November, 1998. He asserts to have had a consistently good record of service throughout his tenure and to have been consistently rated as an ‘excellent officer’ by all reporting officers. According to the petitioner, the third respondent was his reporting officer during the period March 1999 to March, 2000 when the third respondent was an Assistant General Manager, Region-I, Vijayawada Zonal Office and the Controller for the Mangalagiri branch. The petitioner alleges that during April, 1999, a partnership firm by name M/s. S.V. Dairy Farm, Chinnakakani approached the Mangalagiri branch of the respondent bank (while the petitioner was working as a Branch Manager) for sanction of a loan of Rs.44,00,000-00; this application was recommended by the third respondent; though the third respondent was competent to sanction the loan he exerted pressure on the petitioner to recommend the case of M/s. S.V. Dairy Farm for sanction of loan. It is also alleged that the third respondent threatened the petitioner that if he did not recommend the above case, his confidential reports would be damaged. According to the petitioner, on a professional assessment of the loan application and on receipt of reports from the Field Officers, the petitioner on 27-11-1999 informed the third respondent about the fraudulent intentions of the M/s. S.V. Dairy Farm and proposed rejection of the application. On this account, the third respondent is alleged to have made adverse entries in the petitioner’s confidential report for the period March 1999 to March, 2000 downgrading his earlier outstanding record. According to the petitioner neither earlier to the third respondent’s supervisory tenure nor subsequently when the petitioner was transferred to Maharanipeta, Vishakapatnam did the petitioner earn other than an ‘outstanding’ rating in the confidential report. The downgraded assessment by the third respondent during 1999 and 2000 adversly impacted the petitioner’s selection for SMGS-V promotion during 2002, is the grievance of the petitioner. In the writ petition, it is alleged that he lodged a complaint about the ill-treatment by the third respondent to the Chief General Manager and a written representation to the Assistant General Manager, Vigilance. The petitioner’s substantive grievance is that on account of the lukewarm confidential reports during 1999 and 2000, he lost promotion to SMGS-V and on enquiry was informed that since his performance rating for the years 1999 and 2000 were not ‘good’ and ‘up to the mark’, he was not considered for promotion. The petitioner is thus before this Court seeking appropriate reliefs. The third respondent, who is impleaded by name, has filed a counter affidavit clearly and categorically denying the allegations. It is asserted that promotion from SMGS-IV to SMGS-V is on all India basis; that the performance of the petitioner as Branch Manager was always wanting in the areas of supervision and effective control at the branch; controlling the charges; rectification of various irregularities pointed out in the inspection and audit reports; following up of bad and doubtful advances; recovery of NPAs and other critical areas regarding handling the management of the branch. This respondent has categorically denied mounting any pressure on the petitioner for sanction of loan to M/s. S.V. Dairy Farm and asserts that the petitioner’s rating in 1999 and 2000 was done professionally and neutrally. The second respondent has filed a counter. To the extent relevant and material, the second respondent asserts that promotion from SMGS-IV to SMGS-V is on all India basis and a transparent and wholly impartial, unbiased, standardized and foolproof procedure was followed in the matter of promotion to SMGS-V. The procedure followed and the mode of assessment in selections to SMGS-V is spelt out in the second respondent’s counter as under: (a) All officers in SMGS-IV who have put in 4 years of service in that grade are eligible for being considered for promotion to SMG Scale-V and therefore are to be included in the Basket which constitutes the zone of consideration, except, however, to the exclusions like where the punishment after conducting the disciplinary proceedings has been inflicted and the rigor period is yet to be completed. (b) The Personnel and HRD department at local head office will compile Promotion Appraisal Forms on all the officers of the Circle included in the zone of consideration duly taking into account the Confidential Reports (Annual Appraisal Reports Formats) for the past 4 years plus Trait ratings awarded by the Chief General Manager of the Circle. (i) Annual Appraisal Report Forms (AARFs): As per extant instructions, Annual Appraisal Report Form has to be compiled on all officers in the Bank as on the 31st March every year. The report will be compiled by the immediate controlling authority. Bank has introduced the system of review and approval of the AARFs to ensure the objectivity of reporting. Accordingly, all AARFs so complied have to be reviewed by an authority who should be at least one grade above that of the reporting authority. Thereafter, such reports are to be approved by the General Manager/Chief General Manager of the Circle (AARFS of officers upto Middle Management Grade Scale - III will be approved by the General Manager and that of Senior Management Grade Scale-IV and above by the Chief General Manager) who while doing so will objectively and independently assess the AARFs and may retain, increase or decrease the ratings basing on their independent assessment of the performance of the officer for the present year as also the past three years performance. (ii) Traits: The Chief General Manager of the Circle awards ratings under “Traits” to every officer who is eligible for promotion to SMG Scale-V, and these ratings are added to the ratings earned by an officer in the AARFs during the past 4 years. This is the total score secured by an officer in the Promotion Appraisal Form. (c) To ensure that the ratings in the AARFs are correctly carried over to the Promotion Appraisal Forms and that the trait ratings are awarded on objective standards, Bank has introduced the system of evaluation of the Promotion Appraisal Forms by a committee which is constituted by the Corporate Centre with Senior Executives as members thereof. The Committee verifies whether the ratings in the AAARs are correctly carried over to the evaluation sheet and that the score is correctly converted as per the factor advised by the Corporate Centre. (d) Then, the ratings of all such officers duly verified by the Evaluation Committee are advised to the Corporate Centre. All the circles of the Bank will do similar exercise. Thereafter, the Corporate Centre will arrive at the zone of selection ie., merit list for the bank as a whole. (e) The Corporate Centre, then declares the zone of selection with number of officers equivalent to 4 times the number of vacancies for the year and all the officers included in the zone of selection will be interviewed. After the interview, the Corporate Centre will declare the select list at the whole bank level, duly taking into account the overall rating secured by the Officers including interview and also the number of vacancies.” According to the respondent, the interview process for the officers of the Hyderabad circle was concluded by 1-30 P.M. on 27-09-2002. In the writ petition an interim order was issued on 27-09-2002 directing that the petitioner should also be interviewed along with others and the assessment of the interview committee should be placed in a sealed cover pending disposal of the writ petition. This direction was received at 3-00 P.M. on 27-09-2002 by which time the interviews were over and the petitioner did not also turn up at the interview center, at the local head office, Hyderabad. With regard to the allegations regarding biased confidential ratings by the third respondent, the second respondent asserts at paragraph No.8 that the assessment made by the assessing authority is not conclusive. In fact, the performance appraisal of every year and the ratings awarded by the reporting authority would be subjected to the scrutiny by an independent Reviewing Authority and the Reviewing Authority may after reviewing, either increase or decrease the ratings awarded by the reporting authority. The assessment would also be subject to further scrutiny by the approving authority who may retain, increase or decrease the marks, taking into account the previous three years performance and the respective ratings to judge the current year’s performance. In the light of this elaborate system of checks and balances, any likely prejudice of one officer who acted as a reporting officer will not predominate to mar chances for selection to the critical positions such as SMGS-V, is the contention in the second respondent’s counter. Sri P. Anjaneylu, learned counsel representing Sri D.V. Sitaram Murthy, the learned counsel for the petitioner contends that as the consistent outstanding reports of the petitioner (prior to 1999) suffered a diminution in 1999 and 2000, during the currency of the third respondent tenure as the reporting officer and were again restored to outstanding levels after 2003, such downgrading ought not to have been effected without informing the petitioner. Reliance for this contention is placed on a judgment of the Supreme Court in U.P. Jal Nigam v. Prabhat Chandra Jain1. On facts before the Supreme Court, the first respondent was downgraded at a certain point of time. In challenge before the Service Tribunal and before the High Court later, the employee contended that downgrading entries in the confidential reports ought to be communicated. The employer resisted this claim. The High Court observed in favour of the employee holding that as the confidential reports were assets of the employee and are relevant for promotion and extension of service, the employee is entitled to communication of confidential reports which even though not strictly adverse, tantamount to downgrading of what has been recorded in earlier years. It requires to be noticed that the Supreme Court did not approve of the broad principle enunciated by the High Court and explained that the observations of the High Court should not be understood as requiring communication every time an entry takes a step down like falling from ‘very good’ to ‘good’. Such circumstance may not ordinarily be an adverse entry since both are a positive grading. The Supreme Court explained that all that is required by the authority recording confidentials in the situation is to record reasons for such downgrading on the personal file of the officer concerned and to inform the officer of the change, in the form of an advice. Reiterating the well known principles regarding the reasons for recording confidential reports being maintained, the Supreme Court observed: “…All that is required by the authority recording confidentials in the situation is to record reasons for such downgrading on the personal file of the officer concerned, and inform him of the change in the form of an advice. If the variation warranted be not permissible, then the very purpose of writing annual confidential reports would be frustrated. Having achieved an optimum level the employee on his part may slacken in his work, relaxing secure by his one- time achievement. This would be an undesirable situation. All the same the sting of adverseness must, in all events, not be reflected in such variations, as otherwise they shall be communicated as such. It may be emphasized that even a positive confidential entry in a given case can perilously be adverse and to say that an adverse entry should always be qualitatively damaging may not be true. In the instant case we have seen the service record of the first respondent. No reason for the change is mentioned. The downgrading is reflected by comparison. This cannot sustain. Having explained in this manner the case of the first respondent and the system that should prevail in the Jal Nigam, we do not find any difficulty in accepting the ultimate result arrived at by the High Court.” This issue was revisited by the Supreme Court in Union of India v. S.K. Goel2. After considering various precedents with regard to performance appraisals, their recording and communication and also the judgment of the Supreme Court in U.P. Jal Nigam (1 supra), the Apex Court in paragraph No.25 (of the report) observed that the decision in U.P. Jal Nigam’s case (1 supra) is entirely distinguishable on facts and circumstances. The Court held that where the downgrading still meets the bench mark, merely because certain persons are assessed by the DPC as better than the respondents, that does not automatically imply that the person should be communicated his grading. The Apex Court approved the observations of the Central Administrative Tribunal that having regard to the confidential procedure followed by the Union Public Service Commission, it is not possible to hold that the decision of the DPC in grading the appellant as ‘very good’ instead of ‘outstanding’, was arbitrary. Relying upon the judgment in Union Public Service Commission v. L.P. Tiwari & Ors.,3 and reiterating the principle, the Supreme Court pointed out that the jurisdiction of the Courts to interfere with evaluation made by the expert committee was extremely limited and should not easily be interfered with by Courts which do not have the necessary expertise to undertake the exercise that is necessary for the purpose. It is well settled that the Courts are not constituted nor invested with the function of appellate scrutiny over the assessment by the Departmental Promotion Committee in selection of officers for promotion. A range of critical considerations are balanced and evaluated by selection committees. The performance ratings by reporting and supervisory officers are amongst the criteria that go into such assessment. In services, particularly where technical skills in assessment are required like evaluation of senior bank officers for still higher positions, the extensive expertise and managerial exposure of assessing authorities is invaluable and critical to appropriate assessment. The Court would normally defer to such assessment unless there is a clear and established malice or extraneous consideration discernable. Even the petitioner admits that the very same officer three months after the 2000 assessment had characterized the petitioner as ‘outstanding’. The allegation by the petitioner against the third respondent has been clearly and categorically denied by the third respondent. There is no material that enables this Court to conclude that the third respondent bore an animus against the petitioner for any of the reasons alleged in the writ petition. Should the petitioner have any grievance regarding the ratings in the ACRs for the years 1999 and 2000, the petitioner could pursue the grievance redressal procedure. The learned standing counsel for the respondent- bank Sri K. Srinivasa Murthy on instructions submits that any representation of the petitioner including against the adverse/downgrading entries made in his performance appraisal for the years 1999 and 2000 by the third respondent would be considered carefully and diligently by the grievance redressal committee and that no technicalities would be urged to deny appropriate scrutiny of the petitioner’s grievances. The grievance procedure is set out in Chapter-13 of a ‘Reference Book on Staff Matters’ of the first respondent-bank, a copy of which has been furnished to this Court for its perusal. According to this procedure there is an elaborate matrix of procedures available to an employee regarding any grievance that he addresses to the respondent-bank. The respondent-bank undertakes that any representation made by the petitioner with regard to his performance ratings recorded by the third respondent during 1999 and 2000 and regarding overlooking of his promotion as SMGS-V would be expeditiously placed before the grievance redressal committee and the decision of the committee would also be communicated to the petitioner with reasonable expedition. Learned counsel for the petitioner relies on several other judgments including S. Ramachandra Raju v. State of Orissa4; Sukhdeo v. Commr. Amravati Division5; State of U.P. v. Yamuna Shanker Misra6 and an unreported judgment of the Supreme Court dated 20-02-2007 in Appeal (Civil) No. 868 of 2007 arising out of SLP (C) No. 23839 of 2005 for contending that confidential reports are not casual documents, but are important instruments for appraisal of the performance in public service; that adverse entries must be communicated and; that un-communicated entries ought not to be considered for denying promotion. Some of the judgments cited by the learned counsel pertain to adverse entries in relation to cases of compulsory retirement of employees. It is well settled that in cases of compulsory retirement even an un-communicated entry could be taken into consideration. Though in matters of promotion to selection posts, un-communicated adverse entries cannot be so taken into consideration, there appears no established current principle that ‘downgrading’ of an entry from ‘outstanding’ to say ‘very good’ should necessarily be communicated to the employee. Indication of such fall in the standard of an employee may be a salutary practice which conduces administrative efficiency but that is different from holding that non-communication of such ‘downgrading’ vitiates the very selection. As pointed out by the Supreme Court in U.P. Jal Nigam (1 supra), if there be reasons recorded for ‘downgrading’ of the performance appraisal of an officer vis-à-vis previous years, that would be a sufficient safeguard. In the case on hand, there are reasons recorded for the assessment in 1999 and 2000. In the above circumstances, this Court is not inclined to grant the petitioner the relief in specie as is sought in the writ petition. No Mandamus can issue to promote the petitioner to SMGS-V, admittedly a selection post. That is an assessment that must normatively remain with the first respondent. The petitioner is however at liberty to submit a representation to the second respondent within fifteen (15) days regarding his grievance pertaining to non-promotion to SMGS-V including his performance appraisal during the years 1999 and 2000. The respondent Nos. 1 and 2 shall, consistent with the undertaking given to this Court at the hearing, place the petitioner’s representation/grievance before the grievance redressal committee within a week from the date of receipt of the petitioner’s representation and the grievance redressal committee shall consider the petitioner’s grievance and take a reasoned decision thereon which shall be communicated to the petitioner expeditiously and in any event within a period of three (3) months from the date of receipt of a copy of this order. The writ petition is disposed of as above. There shall be no order as to costs. ____________________ GODA RAGHURAM, J Dated: 26-02-2008 Pvks/* 1 . (1996) 2 SCC 363 2 AIR 2007 SC 1199 3 2006 (12) SCALE 278 4 1994 Supp (3) SCC 424 5 (1996) 5 SCC 103 6 (1997) 4 SCC 7