B. Seshagiri Rao vs State Bank of Hyderabad and Others

1 . The method of selection adopted by the State Bank of Hyderabad in the matter of promotions from Grade-I to Grade-A is at issue in this appeal preferred by the unsuccessful petitioner in W.P. No. 986 of 1980.

The State Bank of Hyderabad effected certain promotions between December 2, 1978 and September 24, 1979 to Grade-A based upon the promotion policy evolved on January 7, 1976 and March 9, 1977. Challenging the same W.P. No. 1434 of 1977 was filed in this court which was allowed on November 4, 1978 as a consequence of which all the promotions made during the above period were set aside. Thereafter an interim promotion policy was devised by the State Bank of Hyderabad as a consequence of which 17 promotions were effected on December 2, 1978, one promotion on September 24, 1979 and 17 promotions on August 9, 1979. Assailing the above promotions, W.P. No. 986 of 1980 was filed by the appellant herein from out of which the present appeal arose.

The persons who were promoted between December 2, 1978 and September 24, 1979 were impleaded as respondents 3 to 52 in the writ petition. The case of the appellant in the writ petition was that the promotions were based solely on the basis of the performance of the candidates in the interview and the selections so made are arbitrary, being violative of Article 14 of the Constitution of India. There cannot be a valid selection for performance in the interview regardless of the record of service. The interim promotion policy which was said to be the foundation for effecting the promotions was assailed on the ground that it was irrational. Another point taken was that in the absence of any Rules or Regulations governing promotion to higher post, the Bank was not entitled to make any promotions by resorting to an interim promotion policy. The stand taken by the Bank was that the record of service of the officers was also looked into and the appraisal was made regarding suitability or otherwise keeping in view the performance of the candidates in the interview. The Selection Committee which consisted of very senior officers had taken into consideration the potentialities of the candidates for discharging higher duties as reflected in the assessment made at the time of interview. The mere fact that a candidate has earned a good rating while discharging duties in the lower post by itself is not a reliable factor for judging the suitability to discharge higher responsibilities. There cannot be any mathematical formula as to the method to be followed in the interview; depending upon the exigencies of the service, the requirements of the administration and the potentialities of the candidates as assessed by the Selection Committee, decisions will have to be taken. The impoderables that entered into the selection process cannot be predicted by any discernible ratio.

The learned single Judge dismissed the writ petition holding that the assessment based upon the performance in the interview cannot be said to be fatal or defective as a method for effecting promotion to higher category and the system devised therefore was not irrational by itself. The learned Judge observed : "May be that it is subjective to some extent and capable of abuse, but it cannot be assumed that in every case the system be abused and resorted to for extraneous considerations .... It is for the interviewing body to take a decision as to what method should be adopted. There cannot be any hard and fast rule or a fixed formula in these matters." On the question relating to the illegality of selection in the absence of there being any Rules or Regulations, the learned single Judge declined to grant relief in view of subsequent changes viz., lapse of time and several people including the petitioner-appellant himself getting promotions.

Sri H. S. Gururaja Rao, learned counsel for the appellant, with considerable emphasis contends that the method adopted in making the selection is totally arbitrary; performance in the interview without any regard to the record of service cannot be treated as a valid method of making promotions; even before the Regulations came into force all the promotions were effected basing upon an ad hoc promotion policy and the learned Judge''s finding that because of subsequent events relief should not be granted is not correct.

In opposition to these submissions Sri K. Srinivasa Murthy, learned counsel for the State Bank of Hyderabad, contends that although the promotions in question were made prior to the coming into force of the Regulations, the Management of the Bank was not denuded of the power to make promotions; the basis for the promotions was the ad hoc promotion policy which enjoined upon the Selection Committee to consider not only the performance in the interview but also the record of service. In matters relating to promotion to higher post carrying higher responsibilities, merit takes primary consideration and the best agency to ascertain the suitability or otherwise of the eligible candidates is the Expert Body constituted by the Bank; judicial scrutiny should not result in the court substituting the views for those of the Selection Committee.

The State Bank of Hyderabad (Officers'') Service Regulations, 1979 made in exercise of the power conferred by Section 63 of the State Bank of India (Subsidiary Banks) Act, 1959 came into force with effect from October 1, 1979. The promotions in question were effected prior to that date. The basis for the promotions is the circular No. Per/23 of 1979 dated March 19, 1979 which refers to an earlier circular No. Per/18 of 1977 dated March 9, 1977. We may mention in this context that a part of the earlier circular pertaining to eligibility of candidates for consideration for promotion was struck down in the earlier W.P. No. 1434 of 1977 dated November 4, 1978. The other criteria concerning performance of appraisal, screening committees, Selection Committee, final selection and provision for review remained in tact. The circular dated March 19, 1979 while supplementing the previous circular No. Per/18 of 1977 dated March 9, 1977 in respect of eligibility criteria laid down that candidates shall be considered for promotion to Grade-A on the basis of an interview. So far as the promotions in question are concerned the criteria laid down in the previous Circular dated March 7, 1977, except as regards eligibility, constituted the basis. The question whether in the absence of any Statutory, Regulations, the appointing authority has no power to make promotions, need not be gone in this case for the reason that the appellant himself was subsequently promoted on the basis of the same circular dated March 7, 1977.

What has to be seen is whether the procedure adopted for making the selection was unreasonable or arbitrary. The process leading to the stage of interview as mentioned in the circular dated March 7, 1977, is as follows : On a specially designed format the performance of the eligible officers should be incorporated as a first stage. Thereafter the Screening Committee comprising the Managing Director of the Bank and two General Managers will go through the performance data in respect of all eligible officers and select for interview from among them "whose performance has reached an acceptance standard of efficiency" and who possess adequate potential to occupy senior management positions. Thereafter the Selection Committee comprising the Managing Director of the Bank, one of the non-official Directors of the Bank and the Head of the Subsidiary Banks Department will interview the officers and give individual ratings. Finally the performance data and the ratings in the personal interview are integrated to make the final decision.

The criteria to be followed in the matter of selection, as contained in the Circular dated March 7, 1977, is conspicuously silent as to the extent to which the record of service and the performance at interview will be the decisive factors. The paragraph relating to final selection in the circular merely says : "The performance data and the ratings in the personal interview would be integrated to make the final decision by the Selection Committee". In order to find out what are the factors that weighed with the Selection Committee and the extent to which the record of service and the performance in the interview constituted reliable guidelines in the final Selection, we requested the learned counsel for the Bank to furnish a comparative table indicating the ratings obtained by the appellant and the candidates who have been promoted. The learned counsel has filed a statement before us and also produced the relevant records. On a perusal of the record and the statement we are of the view that there is no discernible basis to awarding grades "A, A-, B+ and B" in the interview, nor our attention was drawn to any guidelines. It is no doubt true that at the screening stage, the record of service was the sole basis and thereafter at the time of interview, although the record of service of each candidate summarised briefly, was placed before the Selection Committee, there appears to be no criteria whatsoever relatable to the record of service in specifying the grades "A, A-and B+". The record of service of the appellant shows that during the period 1974-78 he earned seven "above average" ratings and eight "Good" ratings and one average" rating. The rank in seniority of the appellant in the last was 103. But he was placed as 34 in the order of merit and 33 candidates were alone selected. The last man selected was G. V. Harnoor, rank No. 135. His service record does not contain even a single "Good" rating. He secured six "above average" ratings and ten "average" ratings. The rank of Harnoor in the seniority list is 135 as against the 103rd rank of the appellant. Atleast eight instances of a similar nature, we could find in the statement. What are the guidelines adopted in awarding grades A, A- and B+ in the interview, the learned counsel for the respondent-Bank was not in a position to state before us. He submitted that the record does not contain any guidelines as to why senior officers with better record of service was not selected and junior officers with relatively inferior record of service were preferred for selection. His submission is that performance in the interview played a decisive role and the Selection Committee was satisfied on the basis of the performance of the candidates about their suitability to shoulder higher responsibilities.

We are unable to give judicial assent to the method adopted by the Selection Committee. In R.S. Dass Ors. Vs. Union of India (UOI) and Others, a similar question fell for consideration before the Supreme Court Sabyasachi Mukherji, J. (as he then was) held :

"There has been considerable erosion in the intrinsic sense of fairness and justice in the senior officers by all concerned. From the instances of conduct of many, some of senior officers and men in high position, it cannot be said that such erosion is not only unjustified.

In order to rule out any grievance, actual or fancied, some objective basis for the categorisation in the manner indicated should be laid down. If such objective bases are made known, the fact that after categorisation, the selection of junior officers in preference to senior officers need not state reasons and would not be violative of the canons of justice, but otherwise there will be room for suspicion and that too would not be wholly unjustified."

In the absence of any objective criteria as indicated above by the Supreme Court, we are inclined to hold that subjective considerations without any objective basis played decisive role in the elimination of the appellant. The fact that he was promoted subsequently on June 1, 1980 is no consolation to him, nor will it compensate the injury suffered by him, since at least 49 persons went above him in the seniority list in the higher category. It is a continuing wrong and therefore lapse of time can never be said to be a factor against his right to seek redressal.

In D. Y. Moghe v. Singareni Colleries Co. Ltd. 1991 (1) SLR 474 one of us (Sivaraman Nair J.) had occasion to consider the question of legality of promotion made to middle management level post in the Singareni Colleries and in that context it was observed :

"It is necessary to ensure that the employees at every stage are treated fairly and reasonably. At the lower levels, the organised strength of the workmen is a guarantees for their rights. As they move up to managerial positions, these guarantees gradually wither away. More often than not, it is the individual whim or caprice of the immediate superior that decides the fate of the employee, in the absence of a well-articulated promotion policy. It may not be far too wrong to state in selection for advancement in superior positions in employment, a lot of abuses are likely. Individual fancy may masquerade as managerial discretion. The more deserving senior may become a victim because of lack of the required amount of flexibility and plasticity in his vertebral column. As there are ''yes Minister'' in public administration, there are ''yes sir'' in other employments. Occasionally, a conscientious employee may also say ''no'' and that may perhaps be in the best interests of the institution and even the superior may consider that as an insult and seek revenge at the next available opportunity. This may perhaps be infrequent. But even its possibility has to be eliminated to the utmost extent. That anxiety to ensure a fair and reasonable procedure for selection on the basis of ascertainable criteria which eliminates individual idiosyncracies, and an unbiassed human agency for selection, may constitute the only visible guarantee for managerial employees against abuses of the promotion process. The not-too-frequent scrutiny by courts may ensure the due enforcement of this guarantee."

The above observation applies on all fours to the case on hand. The learned single-Judge declined to grant relief to the appellant herein taking the view that certain promotions were made and the appellant himself got promotion. We are unable to uphold that view especially after what we have found in the records produced before us. What rank the appellant should get and what factors shall enter into the selection process are matters outside the purview of Article 226 of the Constitution of India. We cannot substitute ourselves in the place of the Selection Committee. We need only to state that the claim of the appellant for promotion in preference to his juniors has now to be considered afresh by the Selection Committee. At the time when the selection was made no definite policy was involved by the Bank for purpose of selection. We are not inclined to hold that the Regulations framed subsequently shall govern the selection. We find considerable force in the submission of the learned counsel for the appellant that the requirements in the Regulations i.e. performance and interview shall be 50 : 50 weightage in the matter of selection is not a just or reasonable method to be adopted in the present selection. The interview shall be oriented only for the purpose of assessing and ascertaining the suitability of the candidates for higher assignments (as Grade-A managers). A sure index of the candidate''s capabilities is the service record which must have assessed his worth for higher assignments as we have seen in this case. Those materials shall not be thrown over-board for the only reason that he did not impress the interviewers. In this case we are concerned with a middle management employee''s promotion to a higher position. His worth for such a higher assignment has to be related mostly to his performance and his potentialities, both of which had been assessed earlier. In our country in which the ground realities will not exclude prejudices and predilictions unrelated to these matters and arising out of such factors like caste, community, region and what not - free reign of assessment at the oral test or personal interview so as to over-ride tangible and discernible data regarding performance assessment and appraisal of potential will have serious consequences. At the same time we do not propose to take over the functions of the interviewing Committee and substitute our impressions about men and matters on the basis of the scanty material which we have.

For the above reasons the writ appeal is allowed and the judgment under appeal is set aside. There shall be a direction to respondents 1 and 2 to consider the case of the appellant afresh along with the other officers among the respondents whose performance assessment is similar and assess their relative suitability as reflected by the service record which shall constitute the primary consideration and the performance in the interview shall only be a supplementing guideline but not an overriding factor. On the basis of such assessment the appellant shall be assigned a due place in the seniority list which he would have got had that been done at the relevant time and he shall also be entitled to consequential benefits like consideration for promotion to the next higher post, national increments, refixation of salary etc. It is open to the Bank to consider the question of the adjustment of the seniority. No order as to costs.

The above direction shall be implemented with six months from the date of receipt of a copy of this judgment.