IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) SATURDAY, THE EIGHTEENTH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE SANJAY KUMAR WRIT PETITION NO : 19753 of 1999 Between: K.Narasimha Rao, S/o. Sri. K. Subba Rao, R/o Gudivada, Krishna District. ..... PETITIONER AND 1 Sri Venkateswara Grameena Bank, Rep. by its Chairman, Chittoor. 2 Sri. R.Vijaya Rama Rao, Chairman, S.V.Grameena Bank, Chittoor. .....RESPONDENT(S) 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 to issue an appropriate Writ, order or direction more particularly one in the Nature of Mandamus declaring the promotion policy of the 1st Respondent Bank communicated in Circular No. 058/F.411/99 dated 13-4-1999 as illegal, arbitrary and contrary to law and thereby denial of promotion to the petitioner on the basis of such illegal policy in unjustified, and consequently direct the respondents to promote the petitioner to JMG Scale-II with effect from the date on which his juniors were promoted with all consequential benefits and pass such other ordes may deemed fit and proper in the circumstances of the case. Counsel for the Petitioner:MR.B.ADINARAYANA RAO Counsel for the Respondent No.: . The Court made the following : HONOURABLE SRI JUSTICE SANJAY KUMAR WRIT PETITION No.19753 OF 1999 O R D E R The promotion policy of Sri Venkateswara Grameena Bank, Chittoor, in Circular No.058/F.411/’99 dated 13.04.1999 is under challenge. This policy is titled ‘Promotion Policy Officers – Scale.I to Scale.II for the vacancies identified prior to 29.07.98 i.e., prior to new Regional Rural Banks (Appointment & Promotion of Officers & Other Employees) Rules, 1998 dated 29.07.1998. The petitioner also sought a consequential direction to promote him to JMG Scale-II with effect from the date on which his juniors were promoted with all consequential benefits. The petitioner was appointed as an Officer in Sri Venkateswara Grameena Bank, Chittoor, the first respondent herein, on 17.11.1982. He was sent on deputation to Kanaka Durga Grameena Bank, Gudivada, on 02.09.1996 and at the time of filing of the writ petition he was working as an Officer in Kanaka Durga Grameena Bank, Alluru Village in Mudinepally Mandal of Krishna District. He was promoted as Officer JMG Scale-II by the respondent Bank on 29.01.1998. However, the said promotion was subject to the result of the pending litigation pertaining to the promotion policy followed by the first respondent at that time. Thereafter, consequent to the judgment dated 26.11.1998 of a Full Bench of this Court following the decision of the Supreme Court in B.V.SIVAIAH AND OTHERS ETC. V/s. K.ADDANKI BABU AND OTHERS[1], the petitioner’s promotion was cancelled. He was however permitted to officiate as Officer JMG Scale-II in accordance with the orders of the Full Bench directing maintenance of status-quo till new selections were made. It is relevant to note that the promotion policy under which the petitioner was granted promotion to JMG Scale-II provided for award of marks as follows: Seniority 60 points (10 points for every completed year of service over and above the minimum service of 8 years as on 31.03.1997 subject to a maximum of 60 points). Performance 20 points Interview 20 points. This promotion policy was set aside by the Full Bench of this Court, following the judgment of the Supreme Court in B.V.SIVAIAH’s case (1 supra), holding that it was not in accordance with the principles of ‘seniority-cum-merit’. Thereafter, the first respondent conducted fresh interviews in August, 1999 for effecting promotions to JMG Scale-II Posts as directed by the Full Bench. The petitioner was called for an interview on 23.08.1999 and it is his case that he came to know about the formulation of the new promotion policy under the Circular dated 13.04.1999 only on the day of the interview. Contrary to the earlier practice of communicating the promotion policy with the interview call letter, the respondent-Bank failed to do so on this occasion. As per the new promotion policy, the selection was to be made on the basis of performance of the candidates in the interview and their performance appraisal reports for the preceding three years. 50 marks were allotted for the interview while 50 marks were reserved for performance appraisal. Those candidates who secured a minimum of 50 marks out of the aforementioned total 100 marks were to be listed according to their seniority and in keeping with the said list, necessary promotions were to be effected. The petitioner further stated that he voiced a complaint about the policy before the Chairman of the first respondent Bank, Sri R.Vijaya Rama Rao, and it is his specific case that it was owing to this action on his part that the Chairman, who is impleaded eo nomine as the second respondent in this writ petition, was prejudiced against him as he had challenged his authority. Due to this bias and prejudice, the selection committee, of which second respondent was a member, deliberately rejected the petitioner’s candidature. It is his case that in all, 57 persons were promoted, ignoring his claim for promotion, and out of them atleast 50 Officers were junior to him in JMG Scale-I. He challenged the said action of the first respondent bank alleging that the criterion of ‘seniority-cum-merit’ postulated in B.V.SIVAIAH’s case (1 supra) had again been given a go-by by the first respondent bank, totally ignoring the seniority aspect and opting for promotion on the basis of the performance of the candidates. The petitioner also attacked the allotment of a maximum of 50 marks for the interview and 50 marks for performance appraisal on the ground that the same was in violation of the law laid down by the Supreme Court. He alleged that the magnitude of marks fixed for the interview vitiated the entire process as it led to arbitrariness. The petitioner also pointed out that he had been selected for promotion in January, 1998 and there was no reasonable basis for not finding him acceptable for the same promotion in August, 1999. He alleged malice against the second respondent for the reasons already mentioned supra and sought a direction to declare the promotion policy embodied in the Circular dated 13.04.1999 as illegal, arbitrary and contrary to law and a consequential direction to the respondent bank to promote him to JMG Scale-II with effect from the date on which his juniors were promoted with all consequential benefits. Inspite of service of notice neither of the respondents have chosen to put in an appearance and contest the case. Heard Sri B.Adinarayana Rao, learned counsel appearing for the petitioner and perused the record. It is relevant to note that the Circular dated 13.04.1999 issued by the first respondent bank refers to the decision of the Supreme Court in B.V.SIVAIAH’s case (1 supra). The respondent bank was thus, seemingly aware of the principles of law laid down therein. The mode of selection prescribed under the promotion policy embodied in the said circular provided that all promotions would be made on the basis of ‘seniority-cum-merit’ and elaborated that the selection process would be on the basis of performance in the interview and performance appraisal reports for the preceding three years as per the division of marks given below: Interview -- 50 marks Performance Appraisal Reports -- 50 marks Total -- 100 marks. With regard to performance appraisal assessment, the policy provided that marks given for work performance, personality dimensions and outstanding achievements were to be separately averaged for three years and then reduced to 50 marks. A minimum of 50 marks in the performance appraisal and interview put together would entitle a person to be promoted on the basis of seniority-cum-merit i.e. those who got 50 marks and above in the performance appraisal and interview jointly would be listed according to seniority and the necessary number would be promoted in the order of seniority to fill the declared vacancies. The question that arises is whether the above policy is in keeping with the law laid down by the Supreme Court in B.V.SIVAIAH’s case (1 supra). Sri B.Adinarayanara Rao, learned counsel, stressed upon the fact that the Supreme Court, in B.V.SIVAIAH’s case (1 supra), specifically held that the criterion of ‘seniority-cum-merit’ in the matter of promotion, postulated that given the minimum necessary merit requisite for efficiency of administration the senior, even though less meritorious, shall have priority and a comparative assessment of merit was not required to be made. For assessing the minimum necessary merit the competent authority could lay down the minimum standard that is required and also prescribe the mode of assessment of the merit of the employee who is eligible for consideration for promotion. Such assessment, as per the Supreme Court, could be made by assigning marks for appraisal of performance on the basis of service record and interview and prescribing the minimum marks which would entitle a person to be promoted on the basis of ‘seniority-cum-merit’. The ratio laid down in B.V.SIVAIAH’s case (1 supra) was reaffirmed and followed by the Supreme Court in HARIGOVIND YADAV V/s. REWA SIDHI GRAMIN BANK AND OTHERS[2]. Therein, the Supreme Court reiterated that interviews can be held and assessment of performance can be made by a Bank in connection with promotions to be made on the ‘seniority-cum-merit’ principle. But that can be only to assess the minimum necessary merit. The Supreme Court pointed out that where the procedure adopted does not provide the minimum standard for promotion, but only the minimum standard for interview and does the selection with reference to comparative marks, it would be contrary to the rule of ‘seniority-cum- merit’. The learned counsel also placed reliance upon the judgment of the Supreme Court in BHAGWANDAS TIWARI AND OTHERS V/s. DEWAS SHAJAPUR KSHETRIYA GRAMIN BANK AND OTHERS[3], wherein the Supreme Court again reiterated the principle that ‘seniority-cum-merit’ places greater emphasis on seniority and requires promotions to be made by selection on the basis of seniority subject to the fitness of the candidate to discharge the duties of the post. Reliance was placed therein upon B.V.SIVAIAH’s case (1 supra). The Supreme Court also pointed out that where the promotion was based on seniority-cum-merit, an officer cannot claim promotion as a matter of right by virtue of his seniority alone and if he is found unfit to discharge the duties of the higher post, he may be passed over and an officer junior to him may be promoted. Dealing with the fact situation in that case, the Supreme Court found that a prescription of a minimum of 45 marks out of 60 translating to a minimum of 75% marks was a high percentage indicating the shift of focus from seniority- cum-merit to merit-cum-seniority. The Court stressed that in ‘seniority- cum-merit’, greater emphasis is on seniority though it is not the determinative factor. Applying the above principles to the case on hand, the respondent bank, as stated supra, was aware of the decision of the Supreme Court in B.V.SIVAIAH’s case (1 supra) when it formulated the promotion policy embodied in the Circular dated 13.04.1999. It appears that the first respondent bank relied upon the indication given by the Supreme Court in the following words: “… Such assessment can be made by assigning marks on the basis of appraisal of performance on the basis of service record and interview and prescribing the minimum marks which would entitle a person to be promoted on the basis of seniority-cum-merit.” Basing upon the above, the respondent bank provided for a maximum of 50 marks for the interview and a maximum of 50 marks for the performance appraisal reports. Insofar as the performance appraisal assessment is concerned, the respondent bank stated that marks would be awarded for work performance, personality dimensions and outstanding achievements during the preceding three years and the average of the same would be reduced to 50 marks. It is not indicated as to what would be the apportionment of marks under each individual head of assessment, viz., work performance, personality dimensions and outstanding achievements. Similarly, no parameters are prescribed as to how the candidate is to be assessed in the course of the interview for awarding upto a maximum of 50 marks. The policy further provided that the marks secured by the candidate under the above two heads of 50 marks each are to be clubbed together and if the candidate secures a minimum of 50 marks under both the heads together, he would be declared eligible to be placed in the list of candidates in terms of their seniority. It is no doubt true that the first respondent bank resorted to fixing of a minimum standard in terms of the minimum marks to be secured by a candidate to assess and fix his eligibility to be considered for promotion as per the principles of ‘seniority-cum-merit’. This is, prima facie, in keeping with the law laid down by the Supreme Court in B.V.SIVAIAH’s case (1 supra) and the decisions that followed thereafter. However, the manner in which the respondent bank laid down the parameters for the assessment in respect of this minimum standard (minimum marks) leaves much to be desired. The vagueness and ambiguity in the process of assessment as set out in the policy leaves ample room for arbitrariness. The award of a maximum of 50 marks for the interview without even laying down the parameters of assessment during the interview leaves it open to the assessing authority to manipulate the process. Further, the magnitude of marks, being 50%, is far in excess of the marks which could be awarded for assessment by way of an oral interview. The law laid down by the Supreme Court in this regard in AJAY HASIA AND OTHERS V/s. KHALID MUJIB SEHRAVARDI AND OTHERS[4] still continues to hold the field and needs no reiteration. Another aspect that needs to be noted is the fact that the candidate is only required to meet the minimum standard (minimum marks) in respect of both the heads clubbed together i.e. performance appraisal assessment and interview. Taking a hypothetical case, if a candidate secures only 10 marks by way of performance appraisal assessment, clearly indicating his lack of eligibility to be considered in terms of the record, it would still be open to the Selection Committee to bring him within the zone of consideration by allotting him 40 marks in the oral interview. Such uncontrolled and subjective discretionary power in the Selection Authority, needless to say, is wholly arbitrary and unsustainable. The first respondent bank only paid lip service to the law laid down by the Supreme Court in B.V.SIVAIAH’s case (1 supra) in formulating the promotion policy, reserving to itself untramelled discretion and room to manipulate the promotion process. Such a policy is unsustainable in law being against the very norms of the ‘seniority-cum-merit’ principle. The question, then, is as to what relief can be granted to the petitioner consequent to the above finding on the validity of the subject promotion policy. The stoic indifference of the respondents to this case and the absence of the record with regard to the petitioner’s performance in the selection places this Court in a rather difficult situation. Further, this Court is also conscious of the fact that the decision in this case may unsettle the settled position obtaining over the past decade. However, the wholly unsustainable promotion policy formulated by the respondent bank makes a travesty of the legal principles enunciated by the Supreme Court in B.V.SIVAIAH’s case (1 supra) and must necessarily be struck down. Consequently, there shall be a declaration that the promotion policy of the respondent bank embodied in the Circular dated 13.04.1999 is illegal, arbitrary and contrary to law. There shall be a further direction to the respondent bank to consider the case of the petitioner for promotion to JMG Scale-II with effect from the date on which his juniors were promoted with all consequential benefits, subject to his fulfilling the criterion of the ‘seniority-cum-merit’, principle as detailed supra. The Writ Petition is accordingly allowed. No order as to costs. -------------------------- SANJAY KUMAR,J ______APRIL, 2009 PGS (P.D) THE HONOURABLE MR JUSTICE SANJAY KUMAR WRIT PETITION No.19753 of 1999 ________APRIL, 2009 [1] AIR 1998 SUPREME COURT 2565 [2] (2006) 6 S.C.C. 145 [3] (2006) 12 S.C.C. 574 [4] (1981) 1 SCC 722