1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. WRIT PETITION NO.121 OF 2009 All India Central Bank Bahujan Samaj Karmachari Union, Mumbai ..Petitioner. Vs. Central Bank of India and another ..Respondents. .... Mr. S.K. Gatlewar – Petitioner in person. Mr. P.K. Rele, Senior Advocate with Mr. Vinod Tayade and Mr. R.P. Rele i/b Piyush Shah for Respondent No.1. Mr. Praga Vyas for Respondent No.2. .... CORAM: DR. D.Y. CHANDRACHUD, J. & RAJESH G. KETKAR, J. 3rd April, 2009. P.C. : 1. The challenge in these proceedings is to the validity of a circular issued on 4th July, 2008 by the Central Bank of India in order to govern promotions to Scales IV and V in the senior management grade. 2. On 2nd July, 2008 a circular was issued by the Human Resources Development Department of the Central Bank of India. The circular recites that as a measure of succession planning a 2 recruitment process was initiated in pursuance of approval granted by the Board of Directors in a meeting held on 23rd November, 2007. The purpose was to infuse fresh talent in the Senior Management Grade. Of that 50 posts were in Scale IV and 20 posts in Scale V. 60% of the posts were earmarked for the officers of the bank with a view to furnishing to them an opportunity for shouldering higher responsibilities. An age relaxation of three years was allowed. After the process of selection was pursued, the bank was able to select only 9 candidates for Scale IV and 11 candidates for Scale V. No external candidate was found to be qualified and all the candidates who were selected were officers of the bank. 3. The Board of Directors is stated to have deliberated upon the issue at a meeting held on 22nd May, 2008 and to have approved a proposal to offer one more opportunity of “level jumping” to the existing officers of the bank by way of promotion, by further relaxing the criteria. Accordingly the bank decided to initiate promotions for Scales IV and V in the Senior Management Grade by giving “level 3 jumping” to the existing officers of the bank in Scale II and Scale III, who fulfill the eligibility criteria. The officers who fulfill the criteria in Scale IV were, however, also considered to be eligible for applying for promotion to scale V. Scale III officers who became eligible both for scale IV and V were permitted to apply only for one of the two posts. By a corrigendum dated 4th July, 2008 the maximum age limit as on 30th June, 2008 for the Scale V post was fixed as 52 years. 4. The challenge in the Petition is to the adoption of a policy by the Bank as a result of which Scale II officers became eligible for promotion to Scale IV and scale III officers became eligible for promotion to Scale V. 5. The challenge before the Court is principally founded on a directive issued by the Union Ministry of Finance in the Banking Division of the Department of Economic Affairs on 22nd February, 2005. It has been submitted that areas of autonomy that were prescribed to public sector banks included “rewards and incentives 4 for meritorious performance, except out of turn promotions”. Hence, it has been submitted that the Respondent was not competent to prescribe out of turn promotions within the sphere of its own autonomous functioning. 6. In order to consider the tenability of the submission, it would be necessary to advert to a communication which was issued on 22nd February, 2005 by the Joint Secretary in the Department of Economic Affairs to all managements and officers of public sector banks. The communication highlights that the Finance Minister had in the course of his budget speech emphasized that public sector banks would have full managerial autonomy. This was considered to be necessary particularly in the context of the opening of the economy and globalization, the effect of which was to make public sector banks market oriented. The communication notes that the banking sector shall become increasingly competitive with the emergence of private and foreign banks and consequently public sector banks will have to function with total autonomy and operational flexibility at par with their 5 global counterparts. Based on the discussions held between the Finance Minister and the Chief Executives of the public sector banks on 28th January, 2005 guidelines entitled “Managerial Autonomy for the Public Sector Banks” came to be formulated. Clause 6 of the guidelines, which constitute an annexure to the letter dated 22nd February, 2005 enunciates the existing areas of autonomy; obviously referring thereby to those areas where at that stage public sector banks enjoyed operational flexibility. These areas of autonomy included rewards and incentives for meritorious performance except out of turn promotions. Clause 7 of the guidelines enunciates areas of “further operational autonomy to the Board of Directors now proposed”. Among them in clause (iii) is as follows : “(iii) Decide all Human Resource issues relating to the Bank, including staffing patten, recruitment, placement, transfer, training, promotions, pensions etc.” 7. In Clause 8 further autonomy has been given to banks which are regarded as exhibiting good performance. For such banks, autonomy extends 6 to the framing of human resource policies and procedures : “(i) Framing HR policies and procedures. Boards will have the flexibility to frame their own HR polices and procedures for recruitment including eligibility criteria, mode of selection, levels of entry etc.” 8. It has not been disputed before the Court that the Central Bank of India is covered by the decision of the Union Government to grant autonomy to public sector banks of a certain nature and description. In fact, by a letter of 5th April, 2003 the Reserve Bank of India had appended a list of public sector banks to whom the autonomy was envisaged and the annexure to the letter includes the Cental Bank of India. The contention of the Petitioner, which is to the effect that out of turn promotions were specifically excepted from the area of autonomy cannot be accepted. The guidelines which were framed by the Union Ministry of Finance specify in Clause 6 the existing areas of autonomy meaning thereby those areas as were in existence on the date of the issuance of the communication. The then existing areas of autonomy are obviously widened to include several other areas in Clauses 7 and 8 of the guidelines. In Clause 7 7 each bank is entitled to decide all human resource issues relating to the bank including staffing pattern, recruitment, placement, transfer, training, promotions and pensions. 9. The grant of autonomy to public sector banks is essentially a matter of policy the correctness of which it would not be appropriate for the Court to adjudicate upon in the exercise of its jurisdiction under Article 226. That apart, the circular that was issued on 2nd July, 2008 was clearly referable to the autonomy granted to the bank in pursuance of the decision taken by the Union Ministry of Finance. The corrigendum dated 4th July, 2008 only amplifies the earlier circular by relaxing the eligibility criteria as regards the maximum age to 52 years for a Scale V post. The circumstances in which, the issuance of the circular became necessary have been explained in the affidavit in reply filed on behalf of the Respondent bank. In the affidavit in reply it has been stated that the banking industry has become extremely competitive due to the advent of new generation private sector banks. Technology upgradation and introduction of 8 core banking solutions is taking place on a large scale in public sector banks. Since a majority of the Scale IV and V officers of the Respondent was above 50 years of age, the adverse age profile was causing an impediment in their willingness to shoulder higher responsibilities. In order to meet this situation the bank with the permission of its Board of Directors adopted a process of direct recruitment to Scales IV and V in order to induct young and talented officers as part of succession planning. An opportunity was also given to serving employees in the recruitment process. However, after the recruitment process was conducted only certain internal candidates could be selected and no external candidate could qualify. The total number of vacancies was 50 and 20 respectively for Scales IV and V respectively. Only nine and eleven candidates for the aforesaid vacancies could be selected. Out of eleven candidates recruited for scale V, three did not report. In these circumstances, the Board of Directors approved a proposal to allow one more opportunity to employees of the Bank to fill up the remaining vacancies by way of promotion. It is in these circumstances that Scale II officers were 9 allowed in the fresh process to apply for promotion to scale IV and scale III officers were allowed to apply for scale V. 10. The circumstances in which a decision was taken by the Bank to allow Scale II and III officers to apply for promotions to scales IV and V respectively cannot be regarded as reflective of a colourable exercise of power. There is no breach either of a constitutional or statutory prohibition. The bank as a part of its human resource planning is entitled to frame a policy and to implement it in the form of a circular while seeking to attract the best available talent. 11. In the circumstances we do not find any reason to interfere in the exercise of our jurisdiction under Article 226. 12. The Petition as it has been filed suffers from several defects. The promotion process has already been completed. None of the promoted officers who would be affected have been impleaded. The challenge in the petition is only to the corrigendum dated 4th July, 10 2008 and not to the original circular dated 2nd July, 2008 though as a matter of fact the corrigendum is issued in pursuance of the earlier circular. Be that as it may, we have by consent heard arguments on the merits of the grievance that has been raised before the Court particularly since affidavits have been filed and having examined the submission, we do not find any case for interference. The Petition shall accordingly stand dismissed. DR. D.Y. CHANDRACHUD, J. RAJESH G. KETKAR, J.