Supreme Court of India

B. V. Sivaiah & Ors vs K. Addanki Babu & Ors on 17 July, 1998

Equivalent citations: AIR 1998 SUPREME COURT 2565, 1998 AIR SCW 2577, 1998 LAB. I. C. 2749, (1999) 1 SERVLJ 257, 1998 (2) UJ (SC) 298, 1998 (5) ADSC 533, 1998 (6) SCC 720, 1998 ADSC 5 533, (1998) 3 SCR 782 (SC), 1998 (3) SCR 782, 1998 UJ(SC) 2 298, (1998) 5 JT 96 (SC), 1998 (5) JT 96, (1998) 3 LAB LN 951, (1998) 6 SUPREME 1, (1999) 1 LABLJ 754, (1998) 4 SCT 46, (1998) 3 SCJ 1, (1998) 5 SERVLR 59, (1999) 2 BANKLJ 10, (1999) BANKJ 6, (1998) 2 CURLR 492, 1998 SCC (L&S) 1656, (1999) 2 BANKCLR 87, (1999) 1 BOM CR 174

Author:
S. C. Agrawal

Bench:
S.C. Agrawal
,
S.P. Bharucha
,
B.N. Kirpal

PETITIONER:
B. V. SIVAIAH & ORS.

Vs.

RESPONDENT:
K. ADDANKI BABU & ORS.

DATE OF JUDGMENT: 17/07/1998

BENCH:
S.C. AGRAWAL, S.P. BHARUCHA, B.N. KIRPAL

ACT:

HEADNOTE:

JUDGMENT:

[ WITH CIVIL APPEAL NOS. 3809-3810 of 1996, 3799-3803
of 1996, 3811-3812 of 1996 and 3804-3808 of 1996 AND
CIVIL APPEAL NO. 3297 OF 1998 {arising out of S.L.P.
(C) No. 7321 of 1997], CIVIL APPEAL NOS 3298-3299 OF
1998 {arising out of S.L.P. (C) Nos. 17780-17781 of
1997} and CIVIL APPEAL NOS.... 3300-3301 OF 1998
{arising out of S.L.P. (C) No. 19965-19966 of 1997}]
J U D G M E N T
S. C. AGRAWAL, J.

Leave granted in all Special Petitions.

What is meant by "seniority - cum-merit", the criterion
prescribed for promotion the post of Area Manager/Senior
Manager in the Regional Rural Banks under the Regional Rural
Banks (Appointment & Promotions of Officers and Other
Employees) Rules, 1988 [hereinafter referred to as 'the
Rules'] ? This is the common question which falls for
consideration in these appeals.

The regional Rural Banks have been established under
the provisions of the Regional Rural banks Act, 1976
[hereinafter referred to as 'the Act']. Section 17 of the
Act empowers a Regional Rural Bank to appoint such number of
officers and other officers as it may consider necessary or
desirable, in such manner as may be prescribe, for the
efficient performance of is functions and to determine the
terms and conditions of their appointment and service
Section 24 of the Act lays down that in the discharge of its
functions a Regional Rural Bank shall be guided by such
directions, in regard to matters of policy involving public
interest, as the Central Government may, after consultation
with the national Bank for Agricultural and Rural
Development [hereinafter referred to as 'the National
Bank'], give. Under Section 29 of the Act the Central
Government has been empowered to make rules, after
consultation with the National Bank and sponsor Bank, for
carrying out the provisions of the Act, By clause (ba) of
sub-section (2) of section 29, which was inserted by the

Regional Rural Banks (Amendment) Act, 1987
, the Central
Government was empowered to make Rules relating to manner in
which the officers and other employees of the Regional Rural
Bank shall be appointed. In exercise of the powers conferred
under
Section 29
read with
Section 17
of the Act the Central
Government framed the Rules which were published vide
Notification dated September 28, 1988.

Rule 3 of the Rules provides that the Board of
Directors of each Regional Rural Bank may, in consultation
with its sponsor Bank, create such number of posts as
specified in second schedule to the Rules from time to time.
Rule 4 prescribes that the Board of Directors may, in
consultation with the sponsor Bank, determine the number of
vacancies in each post keeping in view the guidelines issued
by the Central Government from time to time. Rule 5 makes
provision for filling of vacancies and provides that all
vacancies determined under Rule 4 by the Board of Directors
shall be filled by deputation, promotion or direct
recruitment in accordance with the provisions contained in
the Second Schedule to the Rules. With regard the post of
Area/Senior Manager the following provision is made in the
Second Schedule to the Rules:-

"7. Area Managers or Senior Managers

(a) source of Recruitment:

Hundred per cent by promotion
from amongst confirmed officers
working in the bank. Promotions
will be on the basis of
serniority-cum-merit. If
suitable officers are not
available internally, these
posts could be filled by taking
temporarily officers of the
sponsor banks and other banks or
organisations on deputation'

(b) Qualification & Eligibility :

( i) A Graduate of
recognized University or any
equivalent qualifications
recognized as such by Government
of India, preference being given
to Agriculture or Commerce or
Economics graduates.

(ii) Eight years service as an
officer in the regional rural
bank concerned. provided that
the Board may, with the prior
approval of National Bank, relax
the period of service by a
period not exceeding two years,
if suitable candidates of
requisite experience are not
available.

Note: The post of Area Managers
and Senior Managers will be
equivalent in rank and will be
interchangeable.

(c) Mode of Selection :

Interview and assessment of
performance reports for the
preceding three years period as
officer for promotion."

Prior to the making of the Rule appointment on the post
of Area/Senior Manager in Regional Rural Banks was governed
by circulars issued by the Central Government and the
National Bank. By circular dated October 10, 1987 addressed
to the Deputy General manager of the National Bank, the
Central Government indicated the criterian that was required
to be followed in the matter of promotion of Branch Managers
to the post of Area Managers/Senior Managers in Regional
Rural Banks in the following terms:-

"....... it is, therefore,
requested that the Chairman of all
the RRBs may be apprised that since
the posts of Area Managers/Senior
Managers are promotional posts to
be filled up 100% by promotion from
only one source, the non-selection
rule of seniority cum merit has to
be applied. This rural envisages
promotion by seniority with due
consideration to minimum
merit/fitness prescribed. Fitness
implies that there is nothing
against the officer. No
disciplinary action is pending
against him and none is
contemplated. The officer has
neither been reprimanded nor any
adverse remarks have been conveyed
to him in the reasonably recent
past. The promotions are meant to
be made on the above mentioned
consideration."

[emphasis supplied ]
In accordance with the said circular the National Bank
issued a circular dated December 1, 1987 whereby all the
Regional Rural Banks were apprised that the matter relating
to the promotion of Branch Mangers to the posts of
Area/Senior Managers had been examined by it consultation
with the Government of India and the Regional Rural Banks
were advised as under: -

" The posts of Area Managers/Senior
Managers are promotional posts to
be filled up by 100% promotion from
only one source and non-selection
rule of seniority-cum-merit has to
be applied. This rule envisages
promotion by seniority with due
consideration to minimum
merit/fitness prescribed. Fitness
implies that there is nothing
against the officer; no
disciplinary action is pending
against him and none is
contemplated. The officer has
neither been reprimanded nor any
adverse remarks have been conveyed
to him in the reasonably recent
past. The promotions are meant to
be made on the above mentioned
consideration only. In other words,
if a manager satisfies the
qualifications and eligibility
criteria and there is nothing
adverse against him, his due
promotion should not be denied to
him."

These appeals can be categorised in two groups, viz.,
the Andhra Pradesh group and the Madhya Pradesh group. The
Andhra Pradesh group of appeals are directed against the
judgment of the Division Bench of the Andhra Pradesh High
Court dated September 23, 1994 in various writ appeals. The
Madhya Pradesh group of appeals have been filed against the
judgments of the Madhya Pradesh High Court. The main
judgment, which has been followed by the said High Court in
other cases, is in L.P.A. No. 151 of 1993 and connected
matters decided on October 9, 1996. In the impugned
judgments, the High Courts of Andhra Pradesh and Madhya
Pradesh have taken the view that if "seniority -cum-merit
criterion is adopted for the purpose or promotion then first
the senior most eligible employee has to be tested to find
out whether he possesses the minimum required merit for
holding the higher post and only if he is not found suitable
or fit, his immediate junior may be tested for the purpose
of promotion. The said view has been assailed by the various
Regional Rural Banks as well as the promoted officers whose
promotions have been set aside by the impugned judgments.

In the matter of formulation of a policy for promotion
to a higher post, the two competing principles which are
taken into account are inter se seniority and comparative
merit of employees who are eligible for promotion.
In
Sant
Ram Sharma v. State of Rajasthan & Ors.
, 1968 (1) SCR 111,
this court has pointed out that the principle of seniority
ensures absolute objectivity by requiring all promotion to
be made entirely on grounds of seniority and that if a post
falls vacant it is filled by the person who had served
longest in the post immediately below. But the seniority
system is so objective that it fails to take any account of
personal merit. It is fair to every official except the best
ones, an official has nothing to win or lose provided he
does not actually become so inefficient that disciplinary
action has to be taken against him. The criterion of merit,
on the other hand, lays stress on meritorious performance
irrespective of seniority and even a person, though junior
but much more meritorious performance irrespective of
seniority and even a person, though junior but much more
meritorious than his seniors, is selected for promotion. The
Court has expressed the view that there should be a correct
balance between seniority and merit in a proper promotion
policy. the criteria of seniority cum-merit' and 'merit-cum-
seniority' which take into account seniority as well as
merit seek to achieve such a balance.

The principle of 'merit-cum-seniority' lays greater
emphasis on merit and ability and seniority plays a less
significant role. Seniority is to be given weight only when
merit and ability are approximately equal. In the context of
Rule 5(2) of the Indian Administrative Service/Indian Police
Service (Appointment by promotion) Regulations, 1955 which
prescribed that "selection for inclusion in such list shall
be based on merit and suitability in all respects with due
regard to seniority" Mathew. J. in
Union of India v. Mohan
Lal Capoor & Ors.
, 1974 (1) SCR 797, has said :-

" .... for inclusion in the list,
merit and suitability in all
respects should be the governing
consideration and that seniority
should play a secondary role. It is
only when merit and suitability are
roughly equal that seniority will
be a determining factor, or if it
is not fairly possible to make an
assessment inter se of the merit
and suitability of two eligible
candidates ad come to a firm
conclusion, seniority would tilt
the scale." [p.801]
Similarly, Beg J. (as the learned Chief Justice then was)
has said :-

" Thus, we thin that the correct
view, in conformity with the plain
meaning of words used in the
relevant rules, is that the
"entrance" or "inclusion" test for
a place on the select list, is
competitive ad comparative applied
to all eligible candidates and not
minimal like pass marks at an
examination. The Selection
Committee has an unrestricted
choice of the best available
talent, from amongst eligible
candidates, determined by reference
to reasonable criteria applied in
assessing the facts revealed by
service records of all eligible
candidates so that merit and not
mere seniority is the governing
factor." [p.817]
On the other hand, as between the two principles of
seniority and merit, the criterion of 'seniority-cum-merit'
lays greater emphasis on seniority.
In state of
Mysore &
Anr. v. Syed Mahmood & Ors.
, 1968 (3) SCR 363, while
considering Rule 493)(b) f the Mysore State Civil Services
General Recruitment Rules, 1957 which required promotion to
be made by selection on the basis of seniority-cum-merit,
this Court has observed that the rule required promotion to
be made by selection on the basis of "seniority subject to
the fitness of the candidate to discharge the duties of the
post from among persons eligible for promotion". It was
pointed out that where the promotion is based on seniority-
cum-merit the 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 maybe promoted.

In
State of Kerala & Anr. v. N.M. Thomas & Ors.
, 1976
(1) SCR 906, A.N. Ray CJ. has thus explained the criterion
of 'seniority-cum-merit':-

" With regard to promotion the
normal principles are either merit-
cum-seniority or seniority-cum-
merit. seniority-cum-merit means
that given the minimum necessary
merit requisite for efficiency of
administration, the senior though
the less meritorious shall have
priority." [p.930]
The learned counsel for the Regional Rural Banks and
the promoted officers have, however, placed reliance on Para
7(c) of the Second Schedule to the Rules which prescribes
that the mode of selection for promotion would be interview
and assessment of performance reports for the preceding
three years periods and have submitted that under the
criterion of 'seniority-cum-merit', as prescribed under the
Rules, comparative merit has to be assessed for the purpose
of promotion. Reliance has been placed on the following
observations in
State of Mysore v. C.R. Seshadri & Ors.
,
1974 (3) SCR 87 : -

"However, if the criterion for
promotion is one of the seniority-
cum-merit, comparative merit has to
be assessed if length of service is
equal or an outstanding junior is
available for promotion." [p.89]
The learned counsel for the Regional Rural Banks and
the promoted officers have also placed reliance on the
decision of this Court in
Jagathigowda, C.N. & Ors. v.
Chairman, Cauvery Gramina Bank & Ors.
, 1996 (9) SCC 677.

Para 7(c) of the Second Schedule to the Rules does not,
in our opinion, lend support to the contention that the
criterion of seniority-cum-merit envisaged by the Rule
making authority involves assessment of comparative merit
for the purpose of promotion. The word "selection" has been
used in the sense of selecting an officer for promotion on
the basis of the criterion of seniority-cum-merit. The
requirement that such selection shall be made on the basis
of interview and assessment of performance reports for the
preceding three years is consistent with the criterion of
seniority-cum-merit as explained in the state of
Kerala &
Anr. v. N. M. Thomas
& ors. (supra) that "given the
necessary merit requisite for efficiency of administration"

the senior though the less meritorious shall have priority.
The said mode enables an assessment to be made about the
minimum necessary merit requisite fr efficiency of
administration and it cannot be construed as importing
assessment of comparative merit of the officers eligible for
promotion.

In
C.R. Seshadri
(supra) the Court was considering the
question whether High Court could have given a direction to
the State to give to the respondent therein notional
promotion to the post of Deputy Secretary with effect from
the date on which his junior secured such promotion. This
Court said that such a direction could not be given by the
High Court because promotion of a government servant was
basically in government's discretionary power and that in
the absence of positive proof of the relevant service rules
it was hazardous to assume that by efflux of time the
respondent would have spiralled upto Deputy Secretaryship
and that the proper direction could only be that government
would reconsider the case of the respondent afresh for
purpose of notional promotion. in that context, this Court
pointed out that if the rule of promotion is one of 'sheer
seniority' it may well be that promotion is a matter of
course and that if seniority-cum-merit is the rule,
promotion is problematical. Since the relevant rule
governing promotion to the post of Deputy Secretary had not
been placed before it, the Court was not required to define
the criterion of 'seniority-cum-merit' and to delineate the
fine distinction between the criterion of 'seniority-cum-
merit' and the criterion of 'merit-cum-seniority' in the
matter of promotion. In the observations on which reliance
has been placed by the learned counsel for the Rural Banks
and the promoted officers the distinction between
'seniority-cum-merit' and 'merit-cum-seniority' has been
obliterated and both the criterion have been equated. Since
comparative assessment of merit is required to be made while
applying the criterion of 'merit-cum-seniority' has been
obliterated and both the criterion have been equated.

Since
comparative assessment of merit is required to be made while
applying the criterion of 'merit-cum-seniority' ad for
'seniority-cum-merit' no such comparative assessment is
required, the aforementioned observations in the case of

C.R. Seshadri
(supra) on which reliance has been placed
cannot be regarded as correctly reflecting as to what is
meant by the criterion of 'seniority-cum-merit'.

In
Jagathigowda , C.N.
(supra) this Court was dealing
with promotion made to the post of senior Manager in a rural
bank which promotion was made prior to the Rules and was
governed by circulars of the National Bank dated December
31, 1984 and April 7, 1986. Circular dated December 31,1984
provided that promotion to the post of Area Manager/Senior
Manager should be on the basis of seniority-cum-merit. By
circular dated April 7, 1986 it was prescribed that
selection of the eligible candidates should be based on
performance of respective candidates in the bank to be
assessed by a Staff Selection Committee after interviewing
the candidates. The selection was made by the selection
Committee after calling the eligible officers for interview
in accordance with their seniority and in the interview the
marks were awarded according to the performance appraisal
forms. The officers who obtained 85 marks out of 150 were
shortlisted for promotion. The performance appraisal
comprised of matters such as dimension of work, general
intelligence, job knowledge, initiative and resourcefulness
etc. The service record of the officers who assailed the
promotion before the High Court was adverse. In the judgment
under appeal the High Court had set aside the promotion on
the ground that service record of the recent past should
have been taken into consideration and in case there was
nothing adverse against an officer he could not be denied
promotion on the ground that some other junior to him was
more meritorious and that promotions were made on the basis
of selection inasmuch as marks were assigned on the basis of
performance appraisal and interview. The said judgment of
the High Court was reversed by this Court. It was observed
that the circular dated April 7, 1986 issued by the National
Bank specifically provided that 'the selection of the
eligible candidates should be based on performance of
respective candidates in the bank'. It was held that the
High Court was not justified in holding that the performance
appraisal could not be taken into consideration while
considering the officers for promotion to the higher rank.
It was also observed that "while making promotion on the
basis of seniority-cum-merit the totality of the service
record of the officer concerned has to be taken into
consideration". This judgment, in our opinion, does not make
a departure from the law
laid down by
this Court in the
earlier judgments explaining the criterion of 'seniority-
cum-merit' because in this case the selection had been made
by taking into account the seniority as well as performance
and performance was appraised by assigning marks on the
basis of performance appraisal and interview. Those who
secured 85 marks out of 150 marks were shortlisted for
promotion which shows that securing 85 marks out of 150
marks was treated as the minimum standard of merit for
purposes of promotion and those who satisfied the said
minimum standard were selected for promotion on the basis of
seniority.

On behalf of the promoted officers it was urged that
for the purpose of promotion on the basis of seniority-cum-
merit, seniority means the length of service and that among
officers who were appointed on the same date and have the
same length of service seniority can have no bearing and
promotion has to be made on a comparative assessment of
merit of such officers. We are unable to agree. while
applying the principle of seniority-cum-merit for the
purpose of promotion what is required to be considered is
inter se seniority of the employees who are eligible for
consideration. Such seniority is normally determined on the
basis of length of service, but as between employees
appointed on the same date and having the same length of
service, but as between employees appointed on the same date
and having the same length of service, it is generally
determined on the basis of placement in the selected list
for appointment. Such determination of seniority confers
certain rights and the principle of seniority-cum-merit
gives effect to the such rights flowing from seniority. It
cannot, therefore, be said that in the matter of promotion
the basis of seniority-cum-merit seniority has no role where
the employees eligible for promotion were appointed on the
same date and have the same length of service.

We thus arrive at the conclusion that the criterion of
'seniority-cum-merit' in the matter of promotion postulates
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 is not required to be made. For
assessing the minimum necessary merit the competent
authority can lay down the minimum standard that is required
and also prescribe the mode of 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.

We may now examine whether the aforesaid criterion has
been correctly followed by the concerned banks in making the
impugned promotion. We will first take up the Andhra Pradesh
group of appeals which have been field against the judgment
of the Andhra Pradesh High Court dated September 23, 1994.
These appeals relate to two banks, namely, the Rayalaseema
Grameena Bank and the Pinakini Grameena Bank. It Would be
convenient to deal with the appeals relating to each bank
separately.

Rayalaseema Grameena Bank :- In March 1988 the
Rayalaseema Grameena Bank decided to create four posts of
senior Managers and four posts of Area managers. The Senior
Managers work in the office whereas the Area Managers work
in the field. By circular dated March 3, 1988 the Board of
Directors of the Rayalaseema Grameena Bank laid down the
following promotion process:-

" A) ELIGIBILITY :- The Officers
who have put in 8 (Eight) years of
service in the Bank in the cadre of
branch Manager as on 31-12-1987 are
eligible to be considered for the
promotion process.

B) MODALITIES :-

------------

a) Seniority - 45 marks (0.5 marks
for each completed
month of service
over and above the
minimum qualifying
service)

b)Qualif-

ication - 5 marks (Minimum
qualification
applicable to the
cadre shall not be
reckoned)
Post Graduation - 1 Mark
Diploma/s - 1 Mark
CAIIB - Part I - 1 mark
CAIIB - Part II - 2 Marks
(c) Leave - record - 5 marks
(d) Interview - 30 marks
(e) Performance - 65 marks
0.2, These promotions will be
effective from 1st May, 1988.
0.3. The eligible candidates will
be called for the interview
directly ( Candidates need not
submit any application in this
regard) "

Following the said promotion process eight Branch managers
were promoted with effect from May 1, 1988 in proceedings
dated May 3, 1988. The Branch Managers who wee promoted as
Area/Senior Managers on May 3, 1988 assumed office and their
promotions were not questioned by any employee at that time.

After the Rules framed by the Central Government vide
Notification dated September 28, 1988 came into force the
Rayalaseema Grameena Bank, in September 1989, decided to
create five posts of Area/senior Managers and, by circular
dated September 27, 1989, formulated the following promotion
process for filling up of these five posts: -

"1. ELIGIBILITY :-

-----------

All the Officer (Branch Managers)
who have joined the service of the
Bank on or before 1-4-1981 are
eligible to be considered for the
promotion process.

2. MODALITIES :-

-----------

a) Seniority - 34 marks ( 0.75
mark for each
completed month of
service over and
above the minimum
qualifying service)

b)Qualif-

ications - 10 marks (Minimum
qualification
applicable to the
cadre shall not be
reckoned)
Post Graduation - 3 marks
Double Graduation - 1 mark
(like BL, LLB, B.ED.)
Any Diploma/s. - 2 marks
CAIIB - Part I - 2 marks
CAIIB - Part II - 2 marks

(c) Interview - 20 marks

(d) Performance - 56 marks
All the eligible candidates
will be called for the interview
directly. (Candidates need not
submit any applications in this
regard)."

Following that process, five Branch managers were promoted -
two as Area Managers and three as Senior managers - in the
proceedings dated December 1, 1989.

Promotions made in the proceedings dated December 1,
1989 were challenged before the Andhra pradesh high court by
one K.V.T. Prasanna Kumar (by filing Writ Petition No. 17263
of 1989 on December 11, 1989), G. Anantha Raju, P. Sainath
Reddy and C. Vijayakumar Reddy (by filing Writ Petition No.
3546 of 1990 on February 16, 1990). During the pendency of
the said writ petitions P.V. Krishna Murthy filed another
Writ Petition (writ Petition No. 9692 of 1993) on July 13,
1993 in the High Court where he assailed the promotions made
on May 3, 1988 but none of the candidates promoted during
the year 1988 to the posts of Area/Senior Manager was
impleaded as party respondent. All the four Writ Petitions
were heard together by a learned single judge of the High
Court who, by his judgment dated September 7, 1993, allowed
Writ Petitions Nos. 17263 and 17279 of 1989 and 3546 of 1990
and declared that the promotions made on December 1, 1989 to
the post of Area/Senior managers form the post of Branch
Manager in the Rayalaseema Grameena Bank were illegal and
improper. Writ petition No. 9692 of 1993 filed by P.V.
Krishna Murthy, in which the promotions made on May 3, 1988
the 1988 were assailed, was, however, dismissed on the
ground of laches. Against the said judgement of the learned
single judge Writ Appeals Nos. 1242 of 1993, 1232 of 1993
and 1238 of 1993 were filed by the Chairman, Rayalaseema
Grameena Bank, and Writ Appeals Nos. 1233 of 1993 and 1234
of 1993 were filed by the five Branch Managers whose
promotions as Area/Senior managers made on December 1, 1989
had been quashed by the learned single Judge. Writ Appeals
Nos. 1142 of 1993 and 1224 of 1993 were filed by P.V.
Krishnamurthy, the petitioner in Writ Petition No. 3546 of
1990 and Writ Petition No. 9692 of 1993 and Writ Appeal No.
1210 of 1993 was filed by two of the petitioners in Writ
Petition No. 17279 of 1989. These appeals related to the
promotions made on May 3, 1988.

In Writ Appeal No. 1142 of 1993 a contention was raised
that the promotions made on May 3, 1988 had been questioned
in Writ Petition No. 17263 of 1989. The said contention was
rejected by the Division Bench of the High Court and it was
observed that the prayer in the said writ petition was clear
and categorical and no relief was sought for in respect of
the promotions made on May 3, 1988. In Writ Appeal No. 1210
of 1993 an application was made seeking amendment of the
prayer in Writ Petition No. 17279 of 1989 to challenge the
promotions made on May 3, 1988 but the said application was
rejected by the learned judges on the Division Bench of the
High Court. As regards challenge to the validity of
promotions made on May 3, 1988 the learned judges held that
Writ petition No. 9692 of 1993 had been filed after a lapse
of about four years after the promotions were effected in
the year 1988 and the conduct of the writ petitioners in
keeping quiet and submitting themselves to the promotions
process undertaken by the Bank for filling up the posts in
the 1989 disentitled them to seek relief in respect of
promotions made in the year 1988 inasmuch as some rights and
accrued in favour of the employees promoted on May 3, 1988
and if their promotions were to be set aside subsequent to
the promotions made on December 1, 1989 it would cause them
irreparable loss. The learned judges on the Division bench
of the High Court, therefore, dismissed Writ Appeal Nos.
1142 of 1993, 1224 of 1993 and 1210 of 1993. Civil Appeals
Nos. 3804-3808 of 1996 have been filed against that part of
the judgment of the High Court relating to the promotions
made on May 3, 1988.

The learned counsel for the appellants in these appeals
has submitted that now the appellants do not challenge the
promotions that were made on May 3, 1988 since they have
also been promoted as Area/Senior managers and they are only
raising the question regrading restoration of the inter se
seniority of the appellants and the promoted officers on the
post of Area/Senior Manager. We do not find any merit in
this contention. since there was no challenge to the
promotions made on May 3, 1988 till 1993, the promoted
officers had been working for nearly five years by then and
had acquired right to seniority on the basis of such
promotion and they cannot be deprived of the said right. The
High court, in our opinion, has rightly held that the
belated challenge to the promotions made on May 3, 1988
raised by the appellants in these appeals cannot be
entertained. Civil Appeals Nos. 3804-3808 of 1996 are,
therefore, liable to be dismissed.

Writ Appeals Nos. 1242 of 1993, 1232 of 1993 and 1238
of 1993 filed filed by the Rayalaseema Grameena Bank and
Writ appeals Nos. 1233 of 1993 and 1234 of 1993 filed by the
five Branch managers who were promoted as Area/Senior
Managers on the basis of proceedings dated December 1, 1989
were dismissed by the Division bench of the High Court on
the view that the Bank had considered the cases of all the
eligible officers for promotion to the posts of Area/Senior
Managers and only those who secured highest number of marks
amongst them were ultimately promoted and that this method
of selection is contrary to the principle of 'seniority-cum-
merit'. Civil Appeals No. 3799-3803 of 1996 have been filed
by the Rayalaseema Grameena Bank, while Civil appeals Nos.
3811-3812 of 1996 have been filed by five Branch managers
who have been promoted as Area/Senior managers in the
proceeding on December 1, 1989 against this part of the
judgment of the High Court.

Having heard the learned counsel for the Rayalaseema
Grameena bank as well as five branch Managers who had been
promoted as Area/Senior Managers in the proceedings on
December 1, 1989, we find that no case is made out for
interference with the said view of the High Court. The
promotion process
laid down by
the Rayalaseema Grameena Bank
in its circular dated September 27, 1989, on the basis of
which the selection for promotion had been made on December
1, 1989, sets apart 34 marks for seniority, 10 marks for
qualifications, 20 marks for interview and 56 marks for
performance which shows that out of a total number of 120
marks the maximum number of marks that could be awarded for
seniority is 34 and that 0.75 mark was to be given for each
completed moth of service over and above the minimum
qualifying service. In other words, if two person are
appointed on the same day, the same number of marks had to
be awarded for seniority. Moreover out of a total number of
120 marks more than 50% marks were set apart for interview
and performance. The High Court has found that only those
officers who had secured the highest number of marks were
ultimately promoted. It is not a case where minimum
qualifying marks are prescribed for assessment of
performance and merit and those who secure the prescribed
minimum qualifying marks are selected for promotion on the
basis of seniority. In the circumstances, it must be held
that the High Court has rightly come to the conclusion that
the mode of selection that was in fact employed was contrary
to the principle of 'seniority-cum-merit
'
laid down in
the
Rules. Civil Appeals No. 3799-3803 of 1996 filed by the
Rayalaseema Grameena Bank as well as Civil Appeals Nos.
3799-3803 of 1996 filed by the Rayalaseema Grameena Bank as
well as Civil Appeals Nos 3811-2812 of 1996 filed by the
promoted officers are, therefore , liable to be dismissed.

PINAKINI GRAMEENA BANK :- On February 19, 1992 the
Board of Directors of the Pinakini Grameena Bank decided to
create two posts of Area Managers and four posts of senior
Managers. The Board formulated the promotion policy and
communicated it to all the branches through its circular No.
37/PSD/13/92 dated March 16, 1992 which laid down the
following promotion process :-

" ELIGIBILITY : The officers
(managers) who have completed 8
years of service as on 31.03.1992
are eligible for considering the
promotion to Area/Senior Manager
posts.

WEIGHTAGE OF MARKS :

-------------------

(a) Seniority : 55 marks
Officers (Mana-

gers) who have
completed 8 ye-

ars of service
as per SSR of
the Bank.

(b) For passing
CAIIB Part- I : 2 marks
CAIIB Part -II 3 marks

(c) performance : 25 marks

(d) Interview : 15 marks
Total 100 marks
Further, we observe that many of
the Officers (Managers) have not
submitted the performance
appraisals for the years 1989, 1990
and 1991 to assess their
performance. Such officers are
advised to submit the performance
appraisals so as to reach HO : PSD
on or before 31.03.1992. Otherwise,
we will be constrained to assess
their performance based on he
information available with us.

A Committee is constituted for the
purpose of conduction interview as
per Government of India guidelines.

The dates of interview will be
intimated to the candidates
individually, in due course."

In the proceeding held on April 20, 1992 five Branch
Managers were promoted as Area/Senior Managers. Three Branch
Managers, namely, K. Addanki Babu, P. Raghava Rao and V.C.
Krishna Prasad filed writ Petition No. 5204 of 1992 in
Andhra Pradesh High Court wherein they challenged the order
dated April 20, 1992 regarding the promotion of the said
five branch Managers as Area/Senior Managers. The said writ
Petition was allowed by the learned single judge by his
judgment dated December 17, 1993 wherein he followed the
earlier judgement of the learned single judge dated
September 7, 1993 given in the Writ Petitions relating to
the Rayala Seema Grameena Bank . Writ Appeal No. 417 of 1994
was filed by the Pinakini Grameena Bank, while Writ Appeal
No. 422 of 1994 was filed by the promoted officers whose
promotion were set aside by the judgment of the learned
single judge. Both these appeals have been dismissed by the
Division Bench of the High Court. The learned Judges have
pointed out that the cases of all officers eligible for
promotions to the posts of Area/Senior Managers were
considered and only those who secured highest number of
marks amongst them were ultimately promoted and that this
method of selection is contrary to the principle of
'seniority-cum-merit'. Civil Appeal Nos. 3809-3810 of 1996
have been filed by the Chairman, the Pinakini Grameena Bank,
while Civil Appeal No. 3798 of 1996 has been filed by he
promoted officers against that part of the judgment of the
High Court.

Form the circular dated March 16,1992 laying down the
promotion process it is evident that selection was to be
made on the basis of marks to be awarded by selection
committee and that out of total number of 100 marks, 55
marks were to be awarded for seniority while 25 marks were
assigned for performance and 15 marks for interview. There
was no indication in the said circular as to how 55 marks
for seniority were to be given to the Branch Managers who
were eligible for consideration for promotion on March 31,
1992. The said circular did not prescribe minimum qualifying
marks for assessment of performance and merit on the basis
of which an officer would be considered for being selected
and, as pointed out by the High Court, the selection was
made of only those officers who secured highest number of
marks amongst the eligible officers. In the circumstances,
the High Court, in our view, has rightly held that this
method of selection was contrary to the principle of
'seniority-cum-merit' and it virtually amounts to the
application of the principle of 'seniority-cum-merit' and it
virtually amounts to the application of the principle of
'merit-cum-seniority'. We, therefore, do not find any merit
in Civil Appeal Nos. 3809-3810 of 1996 and 3798 of 1996 and
the same are also liable to be dismissed.

We would now take up the Madhya Pradesh group of
appeals of appeals which relate to three banks, namely,
Baster Kshetriya Gramin Bank, Rewa Sidhi Gramin Bank and
chhindwara-Seoni Kshetriya Gramin Bank. The appeals relating
to these banks are also being dealt with separately.

Baster Kshetriya Gramin Bank: - Selection process for
the purpose of promotion to the post of Area Manager/Senior
Manager in the Baster Kshetriya Gramin Bank was contained in
the circular dated February 16, 1993 . The said selection
was made on the basis of interview of all the eligible
officers by the Staff Selection Committee as per the Rules
and a select list of five persons was prepared and on the
basis of the said select list promotions were made. The said
promotions were challenged by three officers who, though
senior, were no promoted, by filing Writ Petition Nos. 43
and 45 of 1993 in the Madhya Pradesh High court. The said
Writ Petitions were allowed by the learned single judge by
judgment dated July 24, 1996 on the view that where Rules
prescribed promotion on the basis of 'seniority-cum-merit'
the seniority has to be give due place and merely because a
person has a better merit, he cannot be promoted over and
above the person senior to him unless he lacks in
qualification or is other wise found to be unfit, i.e.,
there is nothing against him, and that this was not the
position in the instant case and that the concept of
seniority had been given no weightage in this case Letters
patent Appeals (L.P.A. Nos. 150 and 152 of 1996) filed
against
the said judgment
of the learned single judge were
dismissed by the Division bench of the High Court by the
impugned judgment dated October 9, 1996. The learned judges
on the Divisions Bench have found that the Bank has given
weightage to merit first and second place has been given to
seniority and that this shows that the Selection committee
has acted contrary to the principles prescribed under the
Rules and that the selections be made by way of merit-cum-
seniority and not by way of seniority-cum-merit as required
by the Rules. Civil Appeals arising out of Special Leave
Petition (C) No. 17780-81 of 1997 have been filed against

the said judgment
of the High Court by the promoted officers
whose promotion has been quashed by the High Court.

We have heard the learned counsel for the appellants.
It is not disputed that the selection was mad eon the basis
of marks assigned on the basis of interview by the Selection
Committee and those who secured the highest marks were
selected. The selection process adopted for the purpose of
promotion to the post of Area Manager/Senior managers was
thus not in consonance with the principle of 'Seniority-cum

-merit' and the promotions were not made in accordance with
the Rules. Civil Appeals arising out of Special Leave
Petition (C) No. 17780-81 of 1997 are, therefore liable to
be dismissed.

Rewa Sidhi Gramin Bank : - On February 2, 1989 the
Chairman of the Rewa Sidhi Gramin Bank issued the promotion
policy for promotion of Field Supervisors and Officers of
the bank to the higher posts. In paragraph 2.3 of the said
policy it was prescribed that promotion from 'officer to
Area/Senior Manager, subject to satisfaction of minimum
period of service, shall be, at present, on the basis of
assessment of his overall performance based on appraisal
reports on hm and his potentiality to shoulder higher
responsibilities assessed in the interview, duly
supplemented by weightages for seniority, job
responsibility, placement/posting/mobility". With regard to
promotion from Officer to Area/Senior Manager the following
promotion criteria were laid down:

"-----------------------------------------------------------
Promotion percentage Wightage

---------------------------------------------
Seniority Job resp Placement/ Perfor- Inter
onsibility posting/ mance view
mobility

------------------------------------------------------------

Officer
Area/Senior 15 12 8 40 25
Manager

------------------------------------------------------------
As regards weightage for seniority it was provided in
Paragraph 2.4 that one mark for each completed year of
service in the respective cadre/post, subject to a maximum
of 15 marks in respect of promotion from Officer to
Area/Senior Manager would be give. It was further:-

" 2.9. Candidates who have secured
less than 40% marks in interview
will not be considered for
promotion and their names will not
be included in the final merit
list.

2.10 . This list of successful
candidates in the order of total
marks obtained will be placed by
the Staff selection committee
before the Board, duly recommended
for consideration for appointment
or promotion."

(emphasis supplied)
On bench of the High Court has followed its earlier
judgment dated July 4, 1994 in L.P.A. No. 120 of 1997 which
judgment was based on the earlier judgment dated October 9,
1996 passed in L.P.A. No. 151 of 1996 and other connected
matters. Civil Appeals arising out of Special Leave Petition
(C) Nos. 17780-81 of 1997 filed against the judgment dated
October 9, 1996 have been dismissed. For the same reasons,
Civil Appeals arising out of Special Leave Petition (C) Nos.
19965-19966 of 1997 are also liable to be dismissed inasmuch
as according to the promotion policy dated February 2, 1989
selection was made on the basis of total number of marks
obtained by the eligible candidates. The Criterion of the
promotion policy cannot be regarded as being in consonance
with the principle of 'seniority-cum-merit' as prescribed
under the Rules. Civil Appeal arising out of Special Leave
Petition (C) Nos. 19965-19966 of 1997 are, therefore,
dismissed.

Chhindwara - Seoni Kshetriy Gramin Bank : By order
dated April 8, 1993 promotions were made to the post of
Area/Senior Manager in the Chhindwara - Seoni Kshetriya
Gramin Bank on the basis of the recommendations made by a
selection Committee. The said recommendations were made on
the basis of marks awarded after interview and assessment of
the performance of the candidates eligible for promotion.
The said promotions were challenged before the Madhya
Pradesh High court by filing a Writ Petition (M.P. No. 1931
of 1993) which has been allowed by the learned single judge
by his judgment dated February 7, 1997 in view of the
earlier judgment dated July 24, 1996 passed in M.P. No. 943
of 1993. The said judgment was based on the judgment of the
Division Bench of the High Court in L.P.A. No. 151 of 1996.
Civil Appeal arising out of Special Leave Petition (C) No.
7321 of 1997 has been filed by one of the promoted officers
against
the said judgment
of the learned single judge of the
High Court.

During the course of hearing of the appeal the learned
counsel for the respondent - Bank has placed before us the
relevant documents relating to the impugned selection and
promotion. On a perusal of the said documents we find that
50 marks out of the total of 100 marks were prescribed as
the minimum qualifying marks for interview and only those
who had obtained the qualifying marks in interview were
selected for promotion on the basis of seniority. it was,
therefore, a case where a minimum standard was prescribed
for assessing the merit of the candidates and those who
fulfilled the said minimum standard were selected for
promotion on the basis of seniority. In the circumstances,
it cannot be said that the selection has not been made in
accordance with the principle of 'seniority-cum-merit'. We
are, therefore, unable to uphold the impugned judgment of
the High Court. The appeal has to be allowed and the
impugned judgment of the High Court dated February 7, 1997
passed by the learned single Judge of the High Court has to
be set aside and the promotion of the appellant on the post
of Area/Senior Manager under order dated April 8, 1993 has
to be affirmed.

In the result, Civil Appeal Nos. 3798 of 1996, 3809-
3810 of 1996, 3799-3803 of 1996, 3811-3812 of 1996, 3804-
3808 of 1996 and Civil Appeals arising out of Special Leave
Petition (C) Nos. 177/0-17781 of 1997 and 19965-19966 of
1997 are dismissed.

Civil Appeal arising out of Special Leave Petition (C) No.
7321 of 1997 is allowed and the judgment of the Madhya
Pradesh High Court dated February 7, 1997 in M.P. No. 1931
of 1993 is set aside and the said writ petition is
dismissed. No order as to costs.