Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6691 OF 2001
Rajendra Kumar Srivastava & Ors. ... Appellants
v.
Samyut Kshetriya Gramin Bank & Ors. ... Respondents
JUDGMENT
R.V.RAVEENDRAN, J.
The appellants are employees of the first respondent Bank, having
been appointed between 1979 and 1982. By notification dated 28.9.1988,
the Central Government in exercise of powers conferred under section 17
read with section 29 of the Provincial Rural Banks Act, 1976 framed the
“Regional Rural Banks (Appointment and Promotion of Officers and
Other Employees) Rules, 1988 (`Rules’ for short). Rule 5 of the Rules
provided that all vacancies should be filled up by deputation, promotion
or direct recruitment, in accordance with provisions contained in the
Second Schedule to the Rules. Entry 7 in the Second Schedule related to
recruitment to the posts of Area Manager or Senior Manager (in Scale II).
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It provided that all the posts of Area Managers and Senior Managers
should be filled by promotion from among the confirmed officers (in
Scale I) working in the bank on the basis of seniority-cum-merit. It
prescribed the educational qualification (graduate) and minimum period
of service in the feeder cadre (eight years as an officer in the concerned
regional rural bank). It also prescribed the mode of selection by
promotion as “Interview and assessment of performance reports for the
preceding three years period as officers”. Sub-Rule (4) of Rule 10
provided that the Staff Selection Committee shall follow the procedure
determined by the Board for selecting candidates for appointment or
promotion, in accordance with the guidelines issued by the Central
Government from time to time.
2. At the 131st meeting of the Board of Directors of the first
respondent bank held on 29.11.1996, the following procedure for
promotion of officers from scale I to scale II was approved :
“After considering the guidelines contained in the Government of
India’s letter dated 23rd September, 1988 and the Letter no. 823 dated
7th October, 1996 of the National Bank, the Board passed a
resolution that 60 points be earmarked on the basis of work done
during the previous three years in the Selection procedure for
promotion on the Scale II posts and 40 points be given for interview
and in this manner the promotion procedure should be completed.
Also, an information in this behalf be given to the National Bank.”
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In pursuance of the above, the eligible candidates (officers Scale I),
including appellants were considered and interviewed on 16.12.1996 and
17.12.1996 and a select list was published on 20.12.1996 promoting 64
officers (respondents 4 to 67) from scale I to scale II with effect from
20.12.1996.
3. Appellants 1 to 7 were not selected. Many who were selected, were
their juniors. The appellants allege that their service and conduct were
good and there were no adverse entries against them and therefore, they
ought to have been promoted from Officer scale I to scale II. They
therefore filed a writ petition before the Allahabad High Court (WP
No.3151/1997), for quashing the entire promotion process of the first
respondent bank from scale I to scale II culminating in the order dated
20.12.1996 and for a direction to the first respondent bank to undertake
the promotion process afresh. The appellants also sought quashing of the
resolution of the Board of Directors dated 29.11.1996 prescribing the
promotion procedure.
4. The respondent bank resisted the said petition by filing a counter
defending the promotions. During arguments, the High Court secured the
original records from the bank to ascertain the procedure followed by the
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bank in the selection. The High Court also directed that the relevant
documents be brought on record. Accordingly, the relevant documents
were filed by the Bank with an additional affidavit, wherein the Bank
described the selection procedure followed by it, as follows :
“That when the proposal for promotion came before the Board, the
department of personnel under the direction of the Chairman
prepared complete summary giving the past history and the
proposals for selection procedure. A thick booklet was prepared and
in chapter V of the same the details for the procedure for selection
were given. This book was part of the agenda put before the Board
of Directors in its meeting of 23.9.1996 in which the process was
approved with certain modification. A copy of the proceedings of the
Board meeting is Annexure A to this affidavit.
That the whole matter has to be again presented before the Board in
its meeting dt. 29.11.96, as in the meantime a letter was received
from NABARD giving certain directions. The Board in this meeting
adopted the process given in chapter V with certain modifications in
the process as desired in the letter of the NABARD dated 7.10.1996
is Annexure B to this affidavit and a copy of the NABARD letter
dated 7.10.1996 is Annexure C to this affidavit.
That the Chapter V of the Booklet which has been approved by the
Board with modifications is also being filed as Annexure D to this
affidavit.
That in the end of chapter V it is provided that the qualifying marks
will be 78% and those who will secure 78% or above would be
eligible for promotion.
That the selection Committee put these marks obtained on the
seniority list and according to seniority those who were found
eligible they have been promoted. This was done in accordance with
the principle of seniority cum merit. As such there is nothing wrong
in following this procedure.
That none of those petitioners could secure 78% marks and hence
they were not selected.”
5
The High Court, after considering the material made available and
respective contentions, passed the impugned order dated 4.7.2001,
whereby it upheld the process of selection. It held that the two stage
process adopted by the bank – the first preparing a list of candidates who
secured the minimum of 78 marks (aggregate) in the performance
appraisal and interview, and the second promoting the candidates who
secured the minimum marks, strictly on the basis of seniority – satisfied
the seniority-cum-merit criteria for promotion. The said decision is
challenged in this appeal by special leave.
5. It is contended by the appellants that the concept of promotion by
seniority-cum-merit, did not contemplate prescribing of minimum
qualifying marks for assessment of performance/interview, before
applying the principle of seniority for promotion. It is contended that
restricting the promotion to only those who secured the minimum
qualifying marks, was violative of the seniority-cum-merit principle. It is
further contended that even if any qualifying marks could be prescribed
for assessing the minimum necessary merit required to meet the
efficiency of administration, the fixation of an extremely high mark of 78
out of 100 as qualifying marks, had the effect of converting the criteria of
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promotion from seniority-cum-merit to merit-cum-seniority. The
appellants placed strong reliance on the decisions of this Court in B.V.
Sivaiah v. K. Addanki Babu [1998 (6) SCC 720] and Bhagwandas Tiwari
v. Dewas Shajapur Kshetriya Gramin Bank [2006 (12) SCC 574] in
support of their contentions.
6. On the contentions urged, the following two questions arise for our
consideration :
(i) Whether minimum qualifying marks could be prescribed for
assessment of past performance and interview, where the
promotions are to be made on the principle of seniority-cum-merit?
(ii) Whether the first respondent bank was justified in fixing a high
percentage (78%) as the minimum qualifying marks (minimum
merit) for promotion?
Re : Question (i)
7. In State of Kerala vs. N. M. Thomas – 1976 (6) SCC 310, a seven-
Judge Bench of this Court defined the concept of `seniority-cum-merit’.
This Court held that “seniority-cum-merit” means that given the
minimum necessary merit requisite for efficiency of administration, the
senior though the less meritorious shall have priority.” In Union of India
vs. Lt. Gen. Rajendra Singh Kadyan – 2000 (6) SCC 698, this Court
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observed that “seniority-cum-merit” postulates the requirement of certain
minimum merit or satisfying a benchmark previously fixed, and subject
to fulfilling the said requirement, the promotion is based on seniority. It
was pointed out that requirement of assessment of comparative merit was
absent in the case of `seniority-cum-merit’.
8. It is also well settled that the principle of seniority-cum-merit, for
promotion, is different from the principle of `seniority’ and principle of
`merit-cum-seniority’. Where promotion is on the basis of seniority alone,
merit will not play any part at all. But where promotion is on the principle
of seniority-cum-merit, promotion is not automatic with reference to
seniority alone. Merit will also play a significant role. The standard
method of seniority-cum-merit is to subject all the eligible candidates in
the feeder grade (possessing the prescribed educational qualification and
period of service) to a process of assessment of a specified minimum
necessary merit and then promote the candidates who are found to
possess the minimum necessary merit strictly in the order of seniority.
The minimum merit necessary for the post may be assessed either by
subjecting the candidates to a written examination or an interview or by
assessment of their work performance during the previous
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years, or by a combination of either two or all the three of the aforesaid
methods. There is no hard and fast rule as to how the minimum merit is to
be ascertained. So long as the ultimate promotions are based on seniority,
any process for ascertaining the minimum necessary merit, as a basic
requirement, will not militate against the principle of seniority-cum-
merit.
9. In Sivaiah (supra), a three-Judge bench of this Court held that
while the principle of seniority-cum-merit laid greater emphasis on
seniority, the principle of merit-cum-seniority laid greater emphasis on
merit and ability, with seniority playing a less significant role. This Court
held :
“We thus arrive at the conclusion that the criteria 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 of merit of the employee who is eligible for
consideration for promotion. 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.”
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10. Thus it is clear that a process whereby eligible candidates
possessing the minimum necessary merit in the feeder posts is first
ascertained and thereafter, promotions are made strictly in accordance
with seniority, from among those who possess the minimum necessary
merit is recognised and accepted as complying with the principle of
`seniority-cum-merit’. What would offend the rule of seniority-cum-merit
is a process where after assessing the minimum necessary merit,
promotions are made on the basis of merit (instead of seniority) from
among the candidates possessing the minimum necessary merit. If the
criteria adopted for assessment of minimum necessary merit is bona fide
and not unreasonable, it is not open to challenge, as being opposed to the
principle of seniority-cum-merit. We accordingly hold that prescribing
minimum qualifying marks to ascertain the minimum merit necessary for
discharging the functions of the higher post, is not violative of the
concept of promotion by seniority-cum-merit.
Re : Question (ii)
11. The next question is whether fixing of 78% as minimum qualifying
marks (that is as the minimum necessary merit) is unreasonable and
arbitrary. The Rules in this case provide that the mode of selection is by
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interview and assessment of performance reports for the preceding three
years as officer Scale I. The seniority list of officers in scale I was
published on 4.12.1996. Thereafter, the promotion process was held by
earmarking 60 marks for assessment of performance Reports (at the rate
of 20 marks per year) and 40 marks were allotted for interview. The
officers possessing the minimum qualifying marks of 78%, were then
promoted on the basis of seniority. What should be the minimum
necessary merit for promotion, is a matter that is decided by the
management, having in mind the requirements of the post to which
promotions are to be made. The employer has the discretion to fix
different minimum merit, for different categories of posts, subject to the
relevant Rules. For example, for promotions at lower levels, it may fix a
lesser minimum qualifying marks and fix a comparatively higher
minimum qualifying marks for higher posts. In the first respondent Bank,
the post of officer-Grade II (Area Managers and Senior Managers) is a
very senior position, next only to the top post of General Manager. As the
officers promoted to Scale II were required to head larger branches or
departments in the Head Office, shouldering higher responsibilities and
virtually competing with commercial banks, it cannot be said that the
fixing the minimum qualifying marks at 78% is excessive, unreasonable
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or arbitrary. We may refer to the following observations of this Court in
K. Samantaray vs. National Insurance Col. Ltd. – AIR 2003 SCC 4422,
in this context :
“It is for the employer to stipulate the criteria for promotion, the
same pertaining really to the area of policy-making. It was, therefore,
permissible for the respondent to have their own criteria for
adjudging claims on the principle of seniority-cum-merit giving
primacy to merit as well, depending upon the class, category and
nature of posts in the hierarchy of administration and the
requirements of efficiency for such posts.”
12. Another aspect requires to be noticed. Where the assessment of
minimum merit is with reference to previous performance record (Annual
Confidential Records) and/or by interview, as contrasted from a written
examination, prescription of 78% as minimum, will not be considered as
unreasonably high.
13. In Sivaih (supra), this Court held that prescribing a minimum of 50
marks out of 100 for interview was not violative of the principle of
seniority. This Court held :
“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
12was, 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.”
Whether the guidelines/rules adopted for assessing the minimum
necessary merit by prescribing marks under several heads or by
prescribing a specific minimum mark, is reasonable or arbitrary, would
depend upon the facts of each case. If it is demonstrated that the
minimum marks were fixed with the intention of favouring someone or to
specifically exclude someone, the courts may interfere. Similarly, where
the minimum marks are shown to have been fixed to defeat or nullify the
mode of seniority-cum-merit for promotion, there may be a cause for
interference. In other cases, there is very little scope to interfere with the
procedure adopted to ascertain the minimum required merit.
14. In Bhagwandas Tiwari (supra), this Court reiterated the principle
laid down in Sivaiah (supra) and State of UP vs. Jalal Uddin (2005 (1)
SCC 169] that principles of seniority-cum-merit and merit-cum-seniority
are conceptually different and that in seniority-cum-merit greater
emphasis is on seniority though it may not be the only determinative
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factor. It then held on the facts of that case, that the method adopted
therein fixing 75% as minimum marks, violated the principle of seniority-
cum-merit. Reliance is placed by the appellants on the following
observations of this Court:
“The contention that minimum marks were 45 out of 60, means that
an employee is to secure 75% of marks. Such a high percentage
cannot be a measure for prescribing minimum marks to assess merit.
It obviously would be a case of shifting the focus to merit-cum-
seniority principle. It obviously would be a case of shifting the focus
to merit-cum-seniority principle. In para 37 of Sivaiah case, this
Court noted that minimum marks prescribed for assessing merit do
not depart from the seniority-cum-merit principle. But the factual
position is different here. There is no mention that 45 marks out of
60 relate to the prescription of minimum marks for assessing the
merit.”
The appellants contend that the Rules considered in Bhagwandas Tiwari
and in this case are the same and therefore, the effect of the decision in
Bhagwandas Tiwari is that wherever minimum qualifying marks is fixed
as 75% or more, the seniority-cum-merit rule would be violated.
15. We have carefully examined the decision in Bhagwandas Tiwari.
Even if the Rules applicable and mode of selection prescribed (“interview
and assessment of performance for the preceding three years period as
officers for promotion”) are the same in both cases, the criteria and
standards adopted for assessing the minimum necessary merit are
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completely different. We extract below the standards adopted for
promotion in this case and in Bhagwandas Tiwari :
"Standards adopted in this case Marks allotted
(i) Work performance during the previous years 60
(ii) Interview 40
--------------
Total 100
=========
The minimum marks for eligibility for promotion : 78%.
Standards adopted in the case of Bhagwandas :
(a) Work performance during the previous 3 years 30
(b) Period of service (at the rate of 2 marks per year 40
For competed period of service subject to a
Maximum of 40)
(c) Interview 30
————–
Total 100
========
In order be selected for promotion, obtaining 45 marks shall be
compulsory”
It would thus be seen that the schemes for assessing minimum necessary
marks are completely different in the two cases. While work performance
carried only 30 marks in Bhagwandas’s case, it carried 60 marks in this
case. While period of service carried 40 marks in Bhagwandas’s case, no
marks are provided for `period of service’ in this case. While the marks
for interview were 30 in Bhagwandas’s case, it is 40 in this case. The
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minimum qualifying marks was 78 out of 100 in this case. In
Bhagwandas, the minimum qualifying marks prescribed was 45 marks
out of 100. But ignoring the requirement of 45 out of 100, the selection
Committee adopted a minimum of 45 out of 60 (that is aggregate of
marks for work performance and Interview only) ignoring the marks
of 40 for period of service though that was the highest segment. This
Court was persuaded to interfere in that case, as the guidelines which
prescribed the minimum qualifying marks as 45 out of 100 was ignored
and the committee changed the minimum qualifying marks to 45 out of
60, thereby ignoring the marks secured for the period of service. Thus,
the decision in Bhagwandas Tiwari will not assist the appellants.
14. We therefore find no merit in this appeal and it is accordingly
dismissed.
………………………J.
(R V Raveendran)
New Delhi; ..........................J.
November 17, 2009. (P. Sathasivam)
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