Punjab-Haryana High Court
The National Hydro Electric Power ... vs Nhpc Limited And Another on 3 March, 2010
Author: K.Kannan
Bench: K. Kannan
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Civil Writ Petition No.5634 of 2009
Date of decision: 03.03.2010
The National Hydro Electric Power Corporation Officers Association,
Registered Office: # 184, Pocket D, Mayur Vihar II, Delhi through its
President Mr. Swatantra Kumar. ....Petitioner
versus
NHPC Limited and another ...Respondents
CORAM: HON'BLE MR. JUSTICE K. KANNAN
----
Present: Mr.Rajiv Atma Ram, Senior Advocate with
Mr. Aman Arora, Advocate, for the petitioner.
Mr. Lokesh Singhal, Advocate, for the respondents.
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1. Whether reporters of local papers may be allowed to see the
judgment ? Yes.
2. To be referred to the reporters or not ? Yes.
3. Whether the judgment should be reported in the digest ? Yes.
----
K.Kannan, J.
I. Change in promotion policy - cause of lis
1. The writ petition has been filed through the Officers' Association of the National Hydroelectric Power Corporation (NHPC) seeking for quashing of the order dated 27.03.2009 which purports to change the promotion policy by a modification in the relevant rules relating to the weightage for seniority and for merit. By the impugned order, the criteria for promotion which had been previously seniority- cum-merit is alleged to have been altered to merit-cum-seniority. The petitioner's challenge is grounded on the fact that the person that passed Civil Writ Petition No.5634 of 2009 -2- the order, was not competent to issue such modifications and the modification was done without in any way conferring with the affected persons namely, the members of the petitioner Association and hence was arbitrary and violative of the principles of natural justice. II. Relevant old rules of promotion policy
2. The promotion policy and the rules for NHPC executives have been formulated to take effect from 01.01.1997 issued through office order No.22/2006, dated 09.05.2006. The rules provide for the gradation of various classes of persons in the executive cadre. It sets out a range in the grade codes E-1 to E-9 with respective scales of pay at every grade. The promotion rules are set forth in para 4 and for our purpose, immediate consideration paras 4.3, 4.7 and 4.8 are relevant, which are as under :-
"4.3 Save otherwise provided hereunder, the promotion of executives shall be on the basis of seniority, merit, efficiency, grade service and suitability for the higher posts and shall be based on availability of vacancies expect as mentioned in para 4.7 & 4.8.
4.7 Promotion upto Manager shall be based on seniority subject to suitability.
4.8 Promotion to the post of Senior Manager and above shall be by selection based on merit with seniority taking secondary role. Seniority will, however, be the deciding factor between Officers securing equal marks. The DPC shall interview the eligible Managers and above as the case may be to assess their suitability for promotion to the post of Senior Manager & above."
3. The petitioner's claim have a bearing to persons in the grades E-1 to E-5 and para 5 sets out how the scales of pay shall be Civil Writ Petition No.5634 of 2009 -3- grouped in cluster A for grades E-2 to E-5. Para 10 refers to the constitution and role of Departmental Promotion Committees (DPC) and para 10.4 makes reference to how DPC shall exercise its powers in the manner of appraisal for selecting the eligible candidates. Para 10.4 is relevant for our purpose, which is reproduced as under:-
"10.4 While considering promotions to the grade/post of Engineer (E-2) and above up to including the grade/post of Manager (E-5), after taking into account all relevant factors, the DPC will award up to a maximum of 10 marks to each eligible executive keeping in view:
10.4.1 the desirability of according special recognition to experience and performance in the discipline consistent with the company's priorities; 10.4.2 the need to ensure uniformity, consistency and equitability;
10.4.3. potential and suitability for the specific job position to which he is to be promoted;
10.4.4 general conduct, personality, aptitude, sense of involvement commitment to the----
10.4.5 the upward or downward trend in the appraisal ratings. In case of upward trend, the DPC might consider awarding higher marks as compared to the cases where there has been a downward trend, other things remaining equal."
4. The promotion from Assistant Engineer/Assistant Officer in the grade E-1 to the respective higher scales in the order E-2, E-3, E-4 and E-5 have been set forth in para 11. Paras 11.1 and 11.3 makes specific reference about how the promotion shall be on the basis of seniority subject to suitability and how the performance appraisal reports Civil Writ Petition No.5634 of 2009 -4- shall be made, which are reproduced as under :-
"11.1 Promotion of these categories shall be on the basis of seniority subject to suitability and factors as mentioned herein shall be taken into consideration.
11.3 Performance Appraisal Reports-25 Marks Performance Appraisal Reports shall constitute 25 marks in all. The appraisal system will be on a 5 point scale i.e. Outstanding, Very Good, Good, Average and Poor. Each of these ratings have been defined in the formats of Appraisal Reports. For the purpose of aggregation, marks shall be allotted to various ratings as under :-
Outstanding 05
Very Good 04
Good 03
Average 02
Poor 00"
5. The weightage to seniority shall be accorded with 30 marks and the DPC shall be guided by the following:-
"11.5 WEIGHTAGE FOR SENIORITY-30 Marks The DPC shall award a total of 30 marks for seniority in the grade. 5 Marks shall be awarded per year of service in the grade subject to the maximum of 30 marks. Note: In case of promotions from E-1 to E-2 marks will be awarded towards the 'eligibility period' irrespective of qualifying period 3/4 years. For subsequent each completed year in the grade, additional 5 marks per year of service will be awarded to a maximum of 30 marks in total."
The ultimate promotion could be noticed would require a minimum of 36.4 marks in case of general candidates and 31.2 marks in the case of SC/ST candidates out of a total of 65 marks that comprise of 30 marks Civil Writ Petition No.5634 of 2009 -5- for seniority and 25 marks for performance appraisals and 10 marks for DPC interview. 36.4 marks out of 65 marks shall therefore work out to about 55%.
III. Petitioner's contentions:
(a) Power to amend resides only in the Board and not with CMD
6. The contention of the petitioner is that the Chairman-cum- Managing Director's power to change the promotion policy is circumscribed by the powers that could be delegated to the Chairman and Managing Director. While challenging the complete lack of power for the Managing Director to change the promotion policy as set out in the rules, the petitioner referred to the fact that the rules which contained a clause empowering the Chairman-cum-Managing Director to modify/amend and or alter any of the rules procedure of the promotion policy in the overall interest of the Corporation as set forth in Clause 23 of the above mentioned rules, shall be understood in the context Delegation of Powers declared by NHPC Limited. Annexure 'A' of the declaration of delegation of powers sets out the powers which are excluded/excepted from the delegation of powers to the Chairman and Managing Director and it includes in Clause 6 amongst the excepted categories personal matters such as framing of recruitment policies, promotion policies, VRS schemes etc. Sub clause (5) declares in general expression change in policies as one of the excepted items. The contention therefore was that the change in promotion policy effected by the Managing Director could not be anchored to Clause 23 of the rules without adverting to the more fundamental document of what could be Civil Writ Petition No.5634 of 2009 -6- delegated to the Chief Managing Director and how the formulation of promotion policies could not be a subject of delegation and a matter of specific exception provided by the declaration.
(b) Ratification by Board pending writ petition constitutes contempt of Court
7. By pointing out to the fact that the respondent knew that the amendment to the promotion policy released by the CMD was without authority and after the writ petition was filed when a specific challenge had been undertaken that the CMD did not have the power to make the amendment and when the issue was sub judice, in brazen defiance of the Court's power, the Board of Directors had held a meeting on 15.10.2009 and passed a resolution ratifying the decision of the CMD relating to the amendment of the promotion policy. This, according to the petitioner, constituted an attempt of the respondent-Corporation in trying to over reach the powers of the Court and constituted contempt of Court. The learned counsel appearing for the petitioner would rely on the judgments of the Hon'ble Supreme Court in 1998(1) SCT 193 and AIR 1989 Supreme Court 1582 to contend for the proposition that ratification made when the proceedings are pending before the Court when the issue awaited on adjudication was perceived bad and could not take effect.
(c) How the change in policy impacts promotions - some illustrative cases
8. The impugned modification of promotion policy was specifically tampering with clauses 11.5 and 11.6 of the promotion policy which we have extracted above and the weight for seniority which was previously 30 marks had been reduced to 10 marks and the qualifying marks for general candidates which had been fixed at 36.4 Civil Writ Petition No.5634 of 2009 -7- stood changed to 36 marks and in case of SC/ST candidates from 31.2, it had been reduced to 31 marks. This was specifically referred as having the approval of the Chairman and the Managing Director but there had been no reference about the decision of the Board of Directors. The petitioner therefore urged that this change seriously impacted the consideration of seniority-cum-merit and it made a wholesale reversal of the promotion criteria into merit-cum-seniority. If the minimum qualifying marks was required to be 36 for general category and 31 for SC/ST, the qualifying percentage of promotion had been steeply raised from 21% to 25% for both the categories. The recent promotion orders that have been issued would themselves show that even those executives, who had ratings 'Very Good' or 'Good' in their ACRs, had not been promoted. Even an outstanding candidate who might be getting good performance appraisals and ACR assessments and who would be otherwise eligible for promotion if he gets 35 marks in the general category will still lose out on promotion. The petitioner points out to several situations of how a employee, who gets 'Good' in 3rd and 4th year would still require to get 'Very Good' in all the next 3 years to get a minimum of 28 and a promotion could be stalled by the DPC by giving him a grade less than 8 which will make possible an employee to get stagnated at the very entry level. It is pointed out that nearly 75% of the executives are directly recruited to E-2 level and appointed as E-2 (a) after one year of probation. Promotion could be virtually denied to an employee by the impugned order.
Civil Writ Petition No.5634 of 2009 -8-
(d) Change in promotion policy at the 11th hour only to target junior executives
9. Timing of the change in policy itself is also questioned by the petitioner on the ground that the DPC had been constituted and the senior executives were promoted before the impugned amendment and the amendment targeted only the junior executives. The amendment was sought when the performance appraisals reports for the relevant period of 5 years for all eligible employees had been received by the corporate office and all the formalities had been complete. The amendment was made literally at the eleventh hour.
(e) Affected parties not consulted before change in policy
10. The rules which had been framed setting out the promotion policy had been done after discussion with all of the officers and after considering the representations of all the staff who could be affected by the decision and it could not have been altered unilaterally. The impugned change in policy was purported to have been made only on 27.03.2009 but the office order issued giving out the list of promotees bears the date 26.03.2009 i.e. a day earlier of even the date when the promotion policy had been stated as amended. The order dated 26.03.2009 has been referred to by the petitioner as having been posted in the website of the Corporation.
IV. Contentions in defence by the Corporation
11. Responding to all these contentions, the learned counsel appearing for the respondent would submit that the delegation of powers to the CMD was only with respect to matters which were not already covered by the rules and since the Rule 23 specifically empowered the Civil Writ Petition No.5634 of 2009 -9- CMD to effect amendments or alterations, the declaration of delegation of powers must be taken as applying only to matters which are not governed by the rules. The learned counsel refers to the fact that the delegation given would refer only to those items not specifically covered by the rules of the Corporation and consequently, since the promotion policy was governed by the rules, the formulations as regards the delegation of powers were not attracted.
V. In case of conflict between Rules and Delegation of Powers, ratification solves the issue
12. There is an obvious conflict between what is stated in the rules under Clause 23 and what the declaration of delegation of powers states. It can at least be seen that the Corporation itself was conscious that the statement of promotion policy would require to be taken only by the Board and that is how a ratification has been attempted to be made in the meeting of the Board of Directors on 15.10.2009. The issue of ratification itself obtains relevance only if a person acts in excess of authority and the higher authority in whom the powers vests ratifies the same. The amendment carried out by the CMD was a matter which had been declared as excepted under the delegation of powers. But clause 4 of the Guidelines for Exercising the Delegation of Powers, 2008, states, as we have noted: "The delegations given herein refer to those items not specifically covered by the Rules of the Corporation on the subject." With a proviso as wide as above, it is not possible to easily reconcile the elaborate categories that include promotion policies from the list of subjects that cannot be delegated. If ever there is inconsistency, it is resolved by the fact that it has been ratified by the Board subsequent to Civil Writ Petition No.5634 of 2009 - 10 - the writ petition. The learned counsel for the respondent would submit that the DPC meeting had already been fixed to take place on 28-29th March, 2009 and the CMD had to take decision because the cut off date for eligibility was 1st April, 2009. Although the Board did not specifically consider the issue, the CMD had to take quick decision and the fact that the Board had ultimately ratified,the same would indicate the correctness of the action of the CMD. It was certainly not a way of dispatching a contentious issue to screen it from court's adjudication, but I had rather that the subject gets a fuller treatment on the actual content of the change in policy and its tenability than get fettered on a relatively minor issue.
VI. Effect of modification tilts promotion policy from seniority-
cum-merit to merit-cum-seniority
13. If the CMD had a power to amend the rules and the amendability is also put beyond controversy by the subsequent ratification of the Board, the issue would be whether the change sought to be done could be accommodated within the general scheme of the Rules which still retain under clauses 4.3., 4.7., as the relevant criteria for promotion, viz., promotion up to Manager shall be based on seniority subject to suitability. The unreasonableness of change can also be adjudged from the fact that the change which is canvassed completely reversed the policy regarding promotion which altered the weightage to seniority had been grossly reduced and the qualifying marks for a promotion on merit and DPC appraisals went as high up as 80%. The Hon'ble Supreme Court in Bhagwandas Tiwari and others Versus Civil Writ Petition No.5634 of 2009 - 11 - Dewas Shajapur Kshetriya Gramin Bank and others-JT 2006(10) SC 258, set out the principles of seniority-cum-merit and merit-cum- seniority to explain the conceptual difference between the two. The Court held that a minimum of 45 of 60 which a person was bound to secure on the basis of merit amounted to fixing the grade as high as 75% for merits and hold that it would amount to shifting the principle to merit-cum-seniority. In this case, the reduction of marks for seniority to 10 from 30 and befitting a minimum of 28 marks for general candidates and 26 marks in SC/ST in performance appraisals + grade of service puts a heavy slant on merit vis-a-vis seniority. No doubt, seniority-cum- merit does not entitle a person to march for promotion only on the ground of seniority, if he is not suitable, as laid down by the Hon'ble Supreme Court in B.V.Sivaiah and others Versus K. Addaaki Babu and others-1998(6) SCC 720. Situations where merit has a primacy to seniority have been considered, where the policy consideration specifically so lay down. See Union of India Versus Mohan Lal Capoor and others-1973(2) SCC 836. The difference between the two concepts has been brought out in Bhagwandas Tiwari (supra) as follows in para 12:-
"The principles of seniority-cum-merit and merit-cum- seniority are conceptually different. For the former, greater emphasis is laid in seniority, though it is not the determinative factor, while in the latter merit is the determinative factor. In The State of Mysore and another Versus Syed Mahmood and others (supra), it was observed that in the background of Rule 4(3)(b) of the Mysore State Civil Services (General Recruitment) Rules, 1957 which required promotion to be made by selection on the basis of Civil Writ Petition No.5634 of 2009 - 12 - seniority-cum-merit, that the rule required promotion to be made by selection on the basis of "seniority subject to 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 may be promoted. But these are not be only modes for deciding whether promotion is to be granted or not."
The amendment in paras 11.5 and 11.6 alone has the character of shifting the primacy to merit vis-a-vis seniority, which is out of sync with paras 4.3, 4.7 and 4.8 extracted in para 2 of the judgment above. The modification made is, therefore, liable to be quashed. VII. Modification in promotion policy without conferring with affected persons, unfair approach.
14. The learned counsel appearing for the respondent would support the decision taken only on the ground of administrative exigency and the limited powers of review by the Courts. I cannot accede to the plea in a case of complete alteration of the promotion policy brought out unilaterally without conferring with the affected persons and in modification of the policy which had been drafted after due deliberations. A policy which had been declared after mutual discussions, it could not have been even withdrawn or altered without a fuller participation of all the persons affected or at least considered by the Board of Directors before it was given effect to. The change in the policy without conferring with engineer executives, who are affected by the decision and even without a full-fledged resolution passed by the Civil Writ Petition No.5634 of 2009 - 13 - Board of Directors is an irregular exercise of powers that had caused significant prejudice to a large section of people. I have held that the alteration of the policy itself was not justified and being arbitrary and whimsical, it is an immaterial that the Board had ultimately ratified the decision. Even the issue of giving promotion to several classes of employees on 26.03.2009 when the promotion policy itself had been altered the following day was sought to be explained by the respondent by stating that it was not as if the list of names of promotees had been posted on the website on 26.03.2009 itself. On the other hand, publication through internet was made only on 30.03.2009 but it had wrongly set out the date as 26.03.2009. The learned counsel for the respondent would submit that it was an accidental error and there were other small mistakes also in the text of publication. The explanation that it was an accidental error seems rather strange but I still do not want to examine the aspect since I have already held that the modification of the promotion policy was arbitrary and liable to be set aside. VIII. Conclusion
15. The impugned amendment to promotion policy dated 27.03.2009 is set aside and the writ petition is allowed with cost assessed at Rs.10,000/-. The DPC will still consider the issue of promotion in the light of policy that existed immediately earlier and the promotions will be given effect to after a review DPC is held on the promotion policy as it stood before the impugned amendment hereinbefore set aside. The respondents shall be at liberty to re-formulate the promotion policy for future promotions by keeping in view the distinction between 'seniority- Civil Writ Petition No.5634 of 2009 - 14 - cum-merit' and 'merit-cum-seniority' in the manner explained above and assign appropriate weightage in the manner the policy is re-drafted.
(K.KANNAN) JUDGE 03.03.2010 sanjeev