IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition (S/B) No. 83 of 2006 Umesh Kumar Pahwa Son of Sri Som Nath Pahwa, Resident of House No.8/36, Bhola Nath Garden, Kaladhungi Road, Haldwani, District Nainital. .……… Petitioner Versus 1. Board of Director, Nainital-Almora Kshetriya Gramin Bank, Nainital through its Chairman. 2. Chairman, Nainital-Almora Kshetriya Gramin Bank, Nepoli Hotel, Mallital, Nainital. ……….. Respondents Present: Petitioner in person. Mr. Anil Kumar Joshi, Advocate for the respondents. Coram : Hon’ble Barin Ghosh, Chief Justice Hon’ble Servesh Kumar Gupta, Judge Date : 29th June, 2011 JUDGMENT Barin Ghosh, C.J. (Oral) We have heard petitioner appearing in person and learned counsel appearing on behalf of the respondent Bank. 2. Petitioner was in Scale II on 4th March, 2005. On the same date, exercise for giving promotion from Scale II to Scale III was initiated. Petitioner, upon completion of such exercise, was not promoted instead his juniors were promoted. In course of the promotional exercise, petitioner was interviewed. Petitioner contended that non-grant of promotion to the petitioner on completion of promotional exercise and instead giving promotion to his juniors, is not sustainable in law. In order to vindicate his such contention, petitioner has filed the present writ petition. 2 3. In the counter affidavit, it was contended that the Board of Directors of the Bank, on 3rd March, 2005 resolved to fix a minimum qualifying benchmark for Performance Appraisal Reports, and that, since the petitioner did not get that qualifying benchmark, he was not promoted. The minutes of the Board’s meeting held on 3rd March, 2005 was not annexed to the counter affidavit, nor it was stated in the counter affidavit what was the minimum qualifying benchmark fixed for Performance Appraisal Reports. At the hearing, learned counsel for the Bank produced a copy of the said minutes, which is kept as a part of the records of this writ petition. 4. From the said minutes, it appears that the Board of the Bank had fixed 60 marks as the minimum qualifying benchmark for Performance Appraisal Reports and also fixed 60 marks as the minimum qualifying benchmark overall. In other words, an officer could be deemed to be qualified provided he has got 60 marks in Performance Appraisal Reports, and if he has got the same, it shall be deemed that the said officer has obtained the minimum qualifying benchmark. This was purportedly done on the advice given by NABARD on 23rd December, 2004 to Ganga-Yamuna Gramin Bank purportedly on the basis of the judgments of the Hon’ble Supreme Court rendered in B.V. Sivaiah and others versus K. Addanki Babu and others, reported in (1998) 6 SCC 720, and in Union of India versus Rajendra Singh, 2000 (6) SCC 698. The signatory of the said letter of NABARD is Assistant General Manager of NABARD. The same was written in response to a letter of Ganga-Yamuna Gramin Bank addressed to the Sponsor Bank. The said letter, therefore, cannot be treated as a letter written by NABARD to the respondent Bank, though a copy thereof was forwarded to the respondent bank, and at the same time, the same cannot be treated as a circular letter of NABARD circulated to banks similarly situated to that of the respondent Bank. Even assuming the said letter was an advisory letter, the 3 question is whether, in law, the respondent Bank could act on the basis of the said advice. In other words, whether, in law, the respondent Bank could do what it did by fixing a minimum qualifying benchmark for Performance Appraisal Reports. 5. On 9th February, 1976, the Union Legislature made the Regional Rural Banks Act, 1976 to provide for the incorporation, regulation and winding-up of Regional Rural Banks with a view to developing the rural economy by providing for the purpose of development of agriculture, trade, commerce, industry and other productive activities in the rural areas, credit and other facilities, particularly to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs and for matters connected therewith and incidental thereto. The said Act, in accordance with the mandate contained in Sub Section (3) of Section 1 thereof, came into force on 26th September, 1975. Respondent Bank is one of those Regional Rural Banks which has been incorporated/constituted by and under the said Act. Section 17 of the said Act provides, amongst others, that the Regional Rural Banks may appoint such number of officers and other employees as it may consider necessary or desirable in such manner as may be prescribed for the efficient performance of its functions and may determine the terms and conditions of their appointment and service. Therefore, when a Regional Rural Bank, in terms of Section 17 of the Act, is entitled to determine the terms and conditions of appointment and service of officers and other employees to be appointed by it, the manner of appointment is required to be prescribed. Section 29 of the said Act authorizes the Central Government after consultation with the National Bank and the Sponsor Bank by notification in the official gazette to make rules for carrying out the provisions of the Act and, in particular, the manner in which the officers and other employees of Regional Rural Banks shall be appointed. In exercise of power conferred by Section 29 of the Act, the Central Government made the Regional 4 Rural Banks (Appointment and Promotion of Officers and Other Employees) Rules, 1998. In the said Rules, the Central Government provided that the criterion of promotion shall be “seniority-cum- merit”. The said Rules further directed that selection shall be made on the basis of performance in the interview and Performance Appraisal Reports for preceding 5 years as per division of marks prescribed in the Rules. The rules prescribed that for interview there shall be 25 marks and the minimum qualifying marks in the interview are 50%. The rules prescribed that in so far as Performance Appraisal Reports are concerned, there shall be 75 marks and for the purpose of giving such marks, Performance Appraisal Reports for the preceding 5 years shall be considered. The rules made it clear that the total marks shall be 100 marks. 6. Section 30 of the Act authorises the Board of Directors of a Regional Rural Bank after consultation with the Sponsor Bank and the National Bank and with the previous sanction of the Central Government to make regulations not inconsistent with the provisions of the Act and the rules made thereunder to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of the Act. In exercise of such powers, the Board of Directors of the respondent Bank on 11th September, 2001 made the Nainital-Almora Kshetriya Gramin Bank (Officers and Employees) Services Regulations, 2001. In Regulation 14 of the said Regulations, it has been provided that all promotion shall be made at the discretion of the Bank and no officer or employee shall claim as a matter of right to be promoted to any post or cadre; provided that promotions of officers or employees in the Bank shall be made in accordance with the rules framed by the Central Government in terms of Section 29 of the Act. Therefore, in the said Regulations, it was explicitly held out that the promotional criterion, as provided in the Rules made by the Central Government, shall be strictly honoured. Otherwise also, in terms of the mandate contained in Section 17 of the Act, 5 promotional criteria could only be fixed by the Central Government, though the service condition could be fixed by the respondent Bank. 7. Inasmuch as, the said Rules did not prescribe any cut off mark to assess the merit, many a regional banks in the country unwittingly altered the promotional criterion from “seniority-cum- merit” to “merit-cum-seniority” and, accordingly, brought within the zone of consideration, people on the basis of seniority and thereafter on the basis of merit adjudged, promotions were given. This was noticed by the Hon’ble Supreme Court, while dealing with the case of B.V. Sivaiah and others versus K. Addanki Babu and others, reported in (1998) 6 SCC 720. It declared, while rendering the said judgment, that when the criterion for promotion is seniority-cum-merit, seniority plays a greater role and, accordingly, on the basis of requisite merit for efficiency of administration, the senior, though less meritorious, shall have priority and, accordingly, permitted the competent authority to prescribe a cut off mark for assessing the basic minimum mark required for determination of eligibility of the person to be promoted keeping into account the efficiency of the administration. In view of the said judgment of the Hon’ble Supreme Court, it would have been appropriate on the part of the Central Government to fix the cut off mark. That has not been done by the Central Government. In the circumstances, all the regional banks, in view of the said judgment of the Hon’ble Supreme Court, became entitled to fix a minimum cut off mark for the purpose of determining the minimum requisite merit for efficiency of administration. In the instant case, the same was fixed on 3rd March, 2005 at 60 out of 100. The same was and is permissible, in view of what has been provided in the said judgment of the Hon’ble Supreme Court. 6 8. The question is, on the basis of the said judgment of the Hon’ble Supreme Court or otherwise, respondent Bank could fix a minimum cut off mark in respect of Performance Appraisal Reports. The Central Government, as aforesaid, while directing in the Rules that selection process shall include interview and Performance Appraisal Report only and at the same time provided that there shall be a minimum qualifying mark in the interview, but at the same time did not provide any such minimum qualifying marks for Performance Appraisal Report, it must be deemed that the Central Government, while prescribing the selection process, made it absolutely clear that there shall be no minimum qualifying marks for Performance Appraisal Report. The power, thus exercised by the authority competent to do so, could not be exercised by the authority, which was not competent otherwise to do so, even on the basis of judgment rendered by the Hon’ble Supreme Court. In the circumstances, fixation of a minimum cut off mark for Performance Appraisal Reports has no sanction of law. 9. The sealed cover, containing the marks awarded to various officers in course of interview, was produced before us, which was opened by the learned counsel for the respondent Bank, whereupon, looking into the same, he submitted that in course of interview, petitioner obtained 17.75 marks out of 25 marks in the interview. According to the said Rule, therefore, petitioner received the minimum qualifying marks in the interview. 10. We, accordingly, direct the respondent Bank to ascertain whether, after adding 17.75 marks with the marks he is otherwise entitled to receive on account of Performance Appraisal Reports, petitioner has received 60 or higher than 60 marks out of the total of 100 marks, and, if so, to give the petitioner promotion from the date his juniors were promoted to Scale III. In the event he has received less than 60 marks, petitioner shall be informed of the same in writing giving the break up. Let the above exercise be 7 completed as quickly as possible, but not later than one month from the date of service of a copy of this order upon the respondent Bank. It is made clear that in the event it is felt by the petitioner that he has been awarded less marks in Performance Appraisal Report, it shall be open to the petitioner to agitate the same in accordance with law. 11. The writ petition is, accordingly, disposed of. (Servesh Kumar Gupta, J.) ( Barin Ghosh, C.J.) 29.06.2011 29.06.2011 P. Singh