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Judgment
Hanumanthappa, J.-The facts are not in dispute. Respondent No. 1-Cauvery Grameena Bank is sponsored by the State Bank of Mysore. The various branches of the said Bank follow the directions given by the State Bank of Mysore or the Reserve Bank of India as per Section 24 of the Reserve Bank of India Act read with the guidelines time and again given by National Bank for Agriculture and Rural Development (hereinafter referred to as NABARD).
On 11-7-1977 the Bank recruited the petitioners and others as Managers and posted them to work at different places. Both NABARD and the Bank in question thought that it will not be proper if the appointments are stopped at the initial stage itself without promotional avenues. Hence, NABARD issued guidelines as per Annexure-H with regard to the mode of promotions to be made. A reading of it makes clear that promotion to the higher posts of Area Managers and Senior Managers shall be on the basis of seniority-cum-merit and not merit-cum-seniority. "Seniority-cum-merit" means that given the minimum necessary merit requisite for efficiency of administration, the senior though the less meritorious shall have priority, as held by the High Court of Kerala in W.A. No. 604/1988 which was subsequently affirmed by the Supreme Court in State of Kerala v N.M. Thomas, AIR 1976 SC 490 further clarifying that such an interpretation is not in direct contravention of Article 16(1) and (2) of the Constitution.
Out of 35 persons appointed, a few belong to Scheduled Caste, whose appointments were made on the basis of reservation. Not in dispute at the time of appointments made 11-7-1977 all these petitioners were placed above the respondents/promotees. Except the guidelines given by NABARD, there are no Standing Orders regulating the selection, appointment, promotion or other service conditions of respondent-Bank employees.
Petitioner being seniors to others, in view of their possessing the requisite merit and in the absence of intimation of any adverse remarks in respect of their performance, thought that they would be promoted to the next higher post earlier to the respondents but to their surprise respondent Bank promoted the respondents ignoring the case of the petitioners, though respondents were below to them, as Senior Managers without assigning any reasons. Aggrieved by the same the petitioners have approached this Court.
The challenge to the orders of the respondent-Bank promoting respondents ignoring the petitioners, are as under:
(1) Promotion of respondents to the post of Senior Managers ignoring the case of the petitioners though similarly placed and seniors to them, is not only arbitrary and illegal but penal in nature;
(2) Inspite of the specific guidelines given by NABARD, which is the authority which guides and controls the affairs of respondent-Bank in question, respondent-Bank without following the guidelines prescribed by NABARD, promoted respondents. The same is in direct contravention of the guidelines given by NABARD time and again in the matter of promotion;
(3) There cannot be denial of promotion to the petitioners in the absence of any adverse remarks and if any adverse remarks were there, in the absence of the same being intimated to the petitioners;
(4) Merely because in a year or two the service register was not satisfactory or unsatisfactory, is not sufficient to deprive a person to seek right for promotion unless it is shown that the concerned officer does not possess the minimum necessary merit requisite for efficiency of administration, as narrated earlier.
According to the learned counsel for all the petitioners, finding that a particular officer is extraordinary brilliant or his efficiency is super or rank is a Rank holder in the tests, are not the criteria to promote a person. All that is required is a minimum requisite merit even in respect of less efficiency and person possessing the same is entitled for promotion. In support of their contentions, learned counsel for the petitioners relied upon a Division Bench ruling of the Kerala High Court in W.A. No. 604/1988, DD: 7-3-1990 wherein, dealing with almost identical question, it is held that the selections made on the basis of merit-cum-seniority ignoring seniority-cum-merit is illegal and a direction was given to the Bank to redo the list and also to safeguard the interest of those who were promoted, to retain them in the same posts. The relevant observations are at paras 1.5, 19, 21 and some of the observations regarding guidelines are in other paragraphs.
In the subsequent communication dated 1-12-1987 issued by the NABARD, it was pointed out that the posts of Area Managers/Senior Managers are promotional posts and non-selection rule of seniority-cum-merit has to be applied. It also further says that the rule envisages promotion by seniority with due consideration to minimum merit/fitness. It also lays down that there cannot be any supersession unless warranted by disciplinary action or adverse remarks etc.
Promotions not to be automatic without any screening whatsoever. The management is entitled to make an objective assessment to consider the suitability. The screening is meant to weed out persons who are not suitable to hold the posts. It is not meant to provide a chance to juniors to supersede the seniors. These observations were made by the Kerala High Court in the aforementioned decision. The correctness of the said decision was challenged before the Supreme Court in S.L.P. No. The Supreme Court upheld the same. Subsequently, the High Court of Andhra Pradesh, following the decision of the Kerala High Court, took a similar view.
Apart from this, as long back as in 1976 the Supreme Court in Thomas case, AIR 1976 SC 490 while giving its verdict regarding appointments and promotions under the circumstances as now this Court is now called upon to examine, at para 38 of its Judgment held that promotions shall be on the basis of seniority-cum-merit.
In view of the above, learned counsel for the petitioners submits that the promotions of respondents ignoring the case of the petitioner be held as illegal and in their place the petitioners may be directed to be promoted and to give them all consequential benefits.
As an answer to these contentions, learned counsel for the respondent-Bank Sri S.G. Bhat and Sri Venkatachalapathy and Miss Jayashree for some of the promotees, have submitted that none of the contentions of the petitioners have any merit. According to them, the principles laid down in Kerala High Court decision have no application to the case of the petitioners. To them, the guidelines issued by NABARD at Annexure-H were subsequently superseded by the same NABARD''s order at Annexure R-3, the relevant portion of it is extracted below:
"........It may, however, be clarified that the guidelines contained in the above circular cannot be interpreted to mean that promotions would be automatic without any screening whatsoever. The management of the RRBs. are not precluded from making objective assessment of the officer''s/employee''s potential fro considering their suitability for promotion.
A system of objective assessment of the performance of the staff should be evolved and the potential for shouldering higher responsibilities should specifically be recorded in every performance appraisal so as to ensure that only efficient staff are eligible for promotions...."
According to them, though guidelines were fixed mentioning that promotions shall be on the basis of seniority-cum-merit, later NABARD thought fit that seniority alone should not be the factor to be considered for promotion and efficiency and merit should be taken into consideration. To see that efficient people are posted to higher posts, reverse deed policy held that merit-cum-seniority shall be followed. liven if it is assumed that seniority-cum-merit to be followed, it shall be meant that seniority coupled with appraisal of official" performance throughout, including the entries made in the service register/confidential reports, whether favourable or unfavourable, shall be taken into consideration. It was submitted that except in the case of Sri D. Naveen (petitioner in W.P. No. 4191/1988), the confidential report of all other petitioners are not good. In some cases it is stilted ''unsuitable'' and in some cases a little more. After taking into consideration the entries made in the service records, the authorities held the interview/screening test. In the said test the respondents/promotees came out successfully, as such they were promoted and whereas the performance of the petitioners in the screening tests was not satisfactory. According the learned counsel, the principles laid down in Kerala High Court decision have no application to the case on hand.
Sri Venkatachalapathy and Miss Jayashree, learned counsels for some of the promotees/respondents have relied upon the rulings of the Supreme Court and Kerala High Court to explain as to the effect of the guidelines issued by some superior officers to the subordinates, including the effect of Section 24-B of the Reserve Bank of India Act. The authorities so relied upon are AIR 1966 SC 1753, AIR 1979 SC 1060, AIR 1955 SC 896 and AIR 1975 Kerala 4, wherein it is held that the guidelines will not have the force of law; at best they regulate the internal affairs of an authority.
Sri S.G. Bhat, learned counsel for the respondent-Bank submits that as far as the Bank is concerned, it implicitly followed the principles laid down by the Division Bench of the Kerala High Court only after taking into consideration the guidelines mentioned therein, including the performance appraisal and screening test. He lastly contends that as far as the Bank finds that the performance appraisal of the petitioners is satisfactory, definitely their cases for promotion would be considered. He, therefore submitted that the writ petition be rejected.
Sri N.B.N. Swamy, learned counsel for some of the promotees/respondents brought to my notice that his clients who were initially selected in the category of Scheduled Caste were promoted and placed in higher post and therefore they stand on a different footing and therefore there cannot be any order affecting their services, particularly the promotions at the instance of the petitioners.
After hearing both the sides, I am of the view that the approach of the Bank in ignoring the case of the petitioners to the next higher post and considering only the case of the respondents who are before this Court, is a clear case of arbitrariness as it promoted them ignoring the guidelines time and again issued by NABARD as at Annexure-H, including Annexure-K. The second part of Annexure-K states that even in case of seniority-cum-merit or merit-cum-seniority, if for any reason the authority of Bank finds a person unsuitable for promotion, he shall be informed and then proceed to chose another person for promotion. That is the implied meaning of second part of NABARD''s letter.
It is not in dispute that seniority-cum-merit is the main tag. A person who is above automatically entitle for promotion without applying the merit. All that he has to fulfil is he must have requisite minimum efficiency. If a person is promoted to a higher post is capable of discharging the duties in that post with reasonable burden, definitely not the merit which can be equated as is being done to respondents, because except the guidelines, there are no other Rules which regulate the conditions of service of respondent-Bank.
In addition to the above, even the so-called adverse remarks alleged to have been entered in petitioners'' service records except Sri D. Naveen, there is nothing to show that at any time they were intimated those remarks. In the absence of intimation and subsequently making use of the same adverse to the interest of the petitioners is illegal and it is a clear case of deliberate violation of principles of natural justice, which any employer, however great his status, has to follow, which, in my view, has not been followed by the respondent-Bank.
Then coming to the applicability or otherwise of Kerala High Court''s decision to the case on hand. The view taken by the Kerala High Court in identical circumstances is to follow the guidelines issued by NABARD. The Division Bench of the said High Court held that ignoring the case of seniors for promotion while promoting juniors on the basis of some result of screening test etc., that too in the absence of any adverse remarks against the seniors, is incorrect. This view of Kerala High Court was subsequently approved by the Supreme Court and followed by the Andhra Pradesh High Court.
On the other hand, the authorities relied upon by Sri Venkatachalapathy and Miss Jayashree for some of the promotees, in my view, have no application because none of the petitioners claimed that the guidelines have the force of law. What the petitioners contend is that in the absence of definite service Rules, since the Bank in question is sponsored by the State Bank of Mysore with a view to augment agricultural development in rural parts of the State and is controlled by NABARD in all its policy matters, it is fair on the part of the respondent-Bank to adhere to the guidelines issued by NABARD. Even respondents also do not say that the Bank can make appointments or promotions to its branches independently of NABARD''s guidelines. When that is so, it is too much for the respondents to say that guidelines need not be followed or accepted.
Thus, viewed for any angle, the act of respondent-Bank in ignoring the case of petitioners for promotion and promoting the respondents even though the petitioners are above them, has to be held quite arbitrary.
In the result, the writ petitions are allowed. The promotion of respondents to the post of Senior Managers are quashed. The respondent-Bank is directed to consider the case of the petitioners as also respondents for next higher promotional post, namely, Senior Manager, on the basis of seniority-cum-merit, as explained by the Kerala High Court in its Judgment referred to above at para 36, within three months from this date.
If, for any reason the respondent-Bank comes to the conclusion that petitioners or any of them are/is not entitled for promotion, they shall be informed the reasons for such a conclusion in advance. Since the promotion of respondents has been held as illegal and the same are quashed, it is to be made clear that after all their promotions were made not because of any fraud played by them but were made by the respondent-Bank contrary to the guidelines of NABARD, Therefore, it is not proper to direct the respondents/promotees to refund the excess monetary benefits which they got from the date of promotion till today, consequent upon the quashing of their promotion orders.
Since time of three months is fixed for compliance, in the interregnum if the Bank finds any practical difficulty to manage its branches in view of quashing of the promotion of respondents/promotees, it is left to the discretion of the Bank to make its own temporary arrangements either by making suitable in-charge arrangements or otherwise for administrative convenience.