Andhra HC (Pre-Telangana)
K. Kameswara Rao And Ors. vs The State Bank Of Hyderabad, Rep. By Its ... on 28 July, 1993
JUDGMENT Motilal B. Naik, J.
1. The main concern of the petitioners in these writ petitions is the modus operandi adopted by the respondent-State Bank of Hyderabad while effecting promotions from Middle Management Grade Scale-III (MMGS- III) to Senior Management Grade Scale-IV (SMGS-IV).
2. Writ Petition No. 11167/90 is for a declaration that proceeding in Cir.No. PER/90-91/26 dated 9-7-1990 promoting respondents 3" to 20 from MMGS-III to SMGS-IV, is void and contrary to the promotion policy evolved in terms of Circular No. PER/90-91/15 dated 26-5-1990 of the respondent-bank, and for a further direction to the respondent-bank to effect promotions from MMGS-III to SMGS-IV for the year 1990 in accordance with the promotion policy evolved in terms of Circular No. PER/90-91/15 dated 26-5-1990 of the respondent-bank.
3. Writ Petition No. 12510/91 is for a declaration that the circular brought out by the respondent-bank in PER/90-91/34 dated 12-8-1991 is illegal and unconstitutional, and a further direction to the respondent-bank to promote the petitioners from MMGS-III to SMGS-IV with effect from 1-8-1990 with all consequential benefits in accordance with the promotion policy evolved in terms of circular dated 26-5-1990.
4. The events that emanated to file the above writ petitions, which are not in dispute, in short, are as under:- W.P.No. 11167 /90 was filed when the petitioners' cases were ignored while promoting respondents 3 to 20 to SMGS-IV in the year 1990. This Court while admitting the above writ petition, directed that any promotions effected through the proceedings impugned, would be subject to the result of the writ petition. While so, the respondent-bank brought out another circular PER/91-92/34 dated 12-8-1991 contemplating additional requirements, such as performance appraisal and interview with equal weightage of marks while considering promotions to SMGS-IV . Questioning the said circular dated 12-8-1991, W.P.No. 12510/91 was filed. This Court, while admitting the writ petition, directed that the interviews scheduled to be held from 18-11-1991 onwards, pursuant to call- letters issued by the respondent-bank, were to be completed, but promotions should not be effected. During the pendency of the above writ petitions, the petitioners again moved this Court by way of W.P.M.P.No. 15704/92 seeking to stay the action of the respondent-bank contemplating to effect promotions from 1992 in terms of circular dt.12-8-1991. This Court, on hearing the learned counsel for both the parties, directed not to conduct interview upto 20-10-1992 and also directed the writ petition for final hearing.
5. The main grievance of the petitioners in these writ petitions is that the bank is not effecting promotions from MMGS-III to SMGS-IV in accordance with the regular promotion policy as contemplated and circulated vide Circular No. PER/90-91/15 dated 26-5-1990 of the respondent-bank. It is stated that giving a go-by to the promotion policy, the respondent-bank promoted respondents 3 to 20 in W.P.No. 11167/90 for the year 1990, which, according to the petitioners, is contrary to the promotion policy and violative of Articles 14 and 16 of the Constitution of India. The further grievance of the petitioners is that the respondent-bank brought out circular dated 12-8-1991, altering the original promotion policy dated 26-5-90 which is contrary to Regulation 17 of the State Bank of Hyderabad (Officers) Service Regulations, 1979 (for short the Service Regulations') in the absence of further guidelines by the State Bank of India. Alternatively, the other ground raised is that circular dated 12-8-1991 contemplating further requirement of interview and performance appraisal by giving equal weightage is arbitrary inasmuch as it gives scope for 'pick and choose' to such employees of their choice and, therefore, belies the interest of the persons who are placed in similar situation like the petitioners. It is also contended that if the management is allowed to change policies according to their whims and fancies, it would amount to vesting of arbitrary powers in the hands of the respondent-bank though such arbitrary exercise of power is not contemplated in the circular dated 26-5-1990.
6. Sri Ramakrishna Reddy, learned counsel for the petitioners, submits that as per Regulation 17 of the Service Regulations, the State Bank of India issued guidelines in respect of promotion policy for various categories of officers to be followed by the nationalised banks vide proceedings dated 11-5-1990 of the State Bank of India. In the said proceedings, it is informed that compliance of the policy has to be ensured and if any clarification is needed, the same may be referred to the State Bank of India. It is also stated that the said guidelines issued by the State Bank of India indicated the criteria to be adopted in respect of promotions to various categories viz., JMGS-I to MMGS-II, MMGS-II to MMGS-III and MMGS-III to SMGS-IV. Though different requirements are contemplated while effecting promotions from JMGS-I to MMGS-II, MMGS-II to MMGS-III, insofar as promotion to SMGS-IV is concerned, the only requirement contemplated is five years of service in MMGS-III and the existing stipulations regarding date of eligibility, date of promotion, period of probation, sealed cover procedure, etc. It is further argued that the Executive Committee of the respondent-bank has approved the said promotion policy as indicated by the State Bank of India, which was placed before it on 25-5-1990 and the same was indicated in circular dated 26-5-1990. It is stated that in the preamble of the policy under heading 'General Guidelines' in Clause-1, it is specifically indicated that the policy was approved having regard to SBI's guidelines. In Clause-5 it is indicated that the said promotion policy will remain in force for a period of five years subject to review after three years or earlier, if necessitated due to Government of India guidelines. It is further contended that the SBI, in consultation with various Banks Employees' Associations, has issued proceedings dated 11-5-1990 indicating the procedure to be followed in future while seeking to promote officers to various categories. Sri Ramakrishna Reddy contends that by the time an officer becomes eligible for promotion to SMGS-IV, he undergoes strict selection process in lower categories, that is to say, from clerk to JMGS-I and onwards. Thus, to reach this level, normally, an officer will have to put in 25 to 30 years of experience in banking affairs and, therefore, keeping this in view, the consideration for promotion to SMGS-IV is simplified. It is stated that in the year 1990, promotion to SMGS-IV category was effected deviating from the policy contemplated in terms of circular dated 26-5-1990, whereby the petitioners though had all the requirements in terms of said circular, respondents 3 to 20 were promoted, out of whom many are juniors to petitioners.
7. Questioning the promotions to respondents 3 to 20, W.P.No. 11167/90 was filed. In order to overcome the difficulties, it is contended, the respondent-bank addressed a letter dated 12-9-1990 to the SBI and sought approval of the change in policy brought out while adverting not only to the requirement contemplated in circular dt.26-5-1990, but also other aspects, such as interview, performance appraisal, etc., which, according to the petitioners, are not contemplated at all. As per Regulation 17, the SBI guidelines have to be construed as a decision of the Board of Executive Committee until varied. For promotion from MMGS-III to SMGS-IV for the year 1990, no variation was suggested by the SBI and as such the guidelines issued by the SBI are deemed to be in force till further instructions issued by the SBI. It is further submitted that respondents 16 to 20 in W.P.No. 11167/90 had not even completed five years of service in MMGS-III and yet, they were promoted to SMGS-IV, by fixing their seniority in MMGS-III with effect from 1-8-1985, though in fact they were promoted to MMGS-III in 1987. Thus the petitioners contend that the device adopted by the respondent-bank is to nullify the claims of petitioners, some of whom are senior to respondents 3 to 20 and have more experience, requisite eligibility, qualification, etc.
8. The next contention of the petitioners is that the circular dated 12-8-1991 brought out by the respondent-bank for effecting promotions to SMGS-IV from MMGS-III for the year 1991, is not in accordance with the policy contemplated incirculardated26-5-1990,butimposes additional conditions which necessitate undergoing of interview apart from performance appraisal, for which equal weightage of marks are allocated. Petitioners contend that equal weightage to performance appraisal and interview is a device brought out by the respondent-bank to eliminate certain persons who are not 'yesmen' of the authorities. Even otherwise, the details brought in, there is no clarification indicating the marks that would be allotted to the performance appraisal, confidential reports, etc., and , therefore, the petitioners are handicapped in knowing the proportionate marks that are allotted to each facet of the appraisal. The amendment brought in as per circular dated 12-8-1991 confers unfettered powers on the management and as such it is arbitrary, illegal and violative of Articles 19 and 21 of the Constitution of India. It is vigorously contended that contemplating 50% marks for personal interview is unimaginable and against the settled norms. The procedure so contemplated vitiates the entire process of promotions and such allocation is not required at all in higher categories of promotions. When a person has reached certain stage, subjecting such a person to interview and appraisal test is not provided in the promotion policy from MMGS-III to SMGS-IV and, therefore, the respondent-bank cannot adopt its own method, which is contrary to circular dated 26-5-1990.
9. Sri K. Srinivasa Murthy, learned counsel for the respondent-bank, has contended that no doubt the promotion policy contemplated in terms of circular dated 26-5-1990 is in force from l990 onwards for promotions to various categories upto SMGS-IV, but when the question of promotion to higher categories comes up for consideration, it is open to the respondent-bank to test the ability of the persons who are likely to be promoted. It is also contended that promotion from MMGS-III to SMGS-IV is a promotion in senior managerial cadre and, therefore, the ability of a person has to be necessarily tested while giving promotion to SMGS-IV. It is further contended that it is not new to the promotion policy and, therefore, there is no illegality in requiring to undergo interview, which would enable the respondent-bank to assess the ability of the persons to be promoted. Sri Srinivasa Murthy further submitted that insofar as JMGS-I, MMGS-II and MMGS-III are concerned, their responsibility is on a lower footing and insofar as SMGS-IV is concerned, they have wider responsibility and have to manage the affairs in the interest of the banking corporation and would be exposed to various requirements and, therefore, the procedure contemplated is in accordance with the promotion policy of the respondent-bank, which is being followed for many years. It is further submitted that circular dated 26-5-1990 though contemplated experience of five years in MMGS-III, but the respondent-bank is not prevented from bringing other conditions in addition to the one mentioned in that circular. The guidelines are recommendatory in nature and, therefore, they cannot be taken as standards of rules and binding on the respondent-bank. Insofar as the contention that promotion to respondents 16 to 20 is illegal, it is vehemently argued that they were given promotion to MMGS-III in the year 1987 with effect from 1-8-1985, which is within the competence of the respondent-bank and as on 1-8-1990, on which date cases of respondents 16 to 20 came up for consideration, they had requisite five years experience in MMGS-III and, therefore, they were also called for interview and on being tested on various aspects, they were found suitable and were promoted to SMGS-IV. It is further stated that completion of five years of service in MMGS-III is not the only eligibility criterion for promotion to SMGS-IV. Though the requirement as per circular dt.26-5-1990 is from the point of eligibility, insofar as suitability is concerned, the requirements are to be drawn from previous experience of the bank and has to be evolved from time to time depending upon the number of candidates available against the number of vacancies. The promotion policy contemplates interview and such other parameters and has never been the seniority criterion alone. The promotions are effected on merit basis amongst the eligible candidates depending upon the performance in their assignment and interview and such other requirement and, therefore, there is no illegality in selecting respondents 3 to 20 in W.P.No. 11167/90, as some of them are senior to the petitioners and had also requisite experience of five years. Sri Srinivasa Murthy further contends that the promotion policy as contemplated in terms of circular dt.11-5-1990 though prescribes five years experience in the category of MMGS-III, it further contemplates in Clause 2 of promotion policy from MMGS-III to SMGS-IV "the existing stipulations regarding date of eligibility, date of promotion, period of probation, sealed cover procedure, etc., will remain unchanged". Therefore, it is contended by Sri Murthy that the word "etc.," includes holding of interviews also.
10. Sri E. Manohar, learned counsel appearing for respondents 3 to 20 in W.P.No. 11167/90, submits that the petitioners have not placed any rule before this Court to show that promotions are to be effected only on the basis of seniority. He further contends that when there is a provision for appeal, the petitioners cannot take recourse to file a writ petition and, therefore, the writ petition has to be dismissed on this court alone. It is denied that respondents 16 to 20 are not even eligible to be considered for promotion, as by that date they had completed five years in the lower category. There is no illegality in the selection process. The respondent-bank has been following the procedure throughout and, therefore, the petitioners cannot make out any grievance having attended the interview and failed to succeed in such selection process. When all the employees are to undergo the same procedure, no prejudice is caused to the petitioners alone. It is further contended that the order of promotion of respondents 3 to 20 dated 1-5-1987 is not challenged. It is not the first time that 50% marks are allotted to interview. It is contended that respondents 3 to 20 have requisite qualification and eligibility and therefore, the petitioners having unsuccessful in the interview, cannot make out grievances against respondents 3 to 20.
11. Under this background of rival contentions, the questions that fall for consideration are:
(1) Whether the respondent-bank has to abide by the promotion policy contemplated in terms of SBI's proceeding dated 11-5-1990, which was approved by the Executive Committee of the respondent-bank on 25-5-1990 and circulated on 26-5-1990 to that effect and whether the respondent-bank can adopt its own methods over and above the norms fixed by the SBI?
(2) Whether the amended promotion policy as brought out in terms of circular No. PER/90-91/34 dated 12-8-1991 is contrary to the promotion policy and has the approval of SBI and whether such amended policy could be called to sustain?
12. In order to arrive at a reasonable conclusion, it is necessary to refer to the relevant provisions contemplated in the Service Regulations. Regulations 17, which deals with promotional aspect reads:
"Promotions:
17. Promotions to all grades of officers in the Bank shall be made in accordance with the policy laid down by the Board or the Executive Committee from time to time HAVING REGARD TO THE STATE BANK'S GUIDELINES."
Regulation 74 reads:
"74. Wherever these regulations require that any matter shall be in accordance with the State Bank's guidelines, such guidelines shall, until varied, be deemed to be decisions of the Board or the Executive Committee."
13. It is pertinent to note that as per Regulation 17, the SBI issued guidelines to be followed while effecting promotions from JMGS-I to MMGS-II, MMGS-II to MMGS-III and MMGS-III to SMGS-IV in consultation with the All Indian Bank Officers Associations, vide proceedings dated 11-5-1990. In the said proceedings, it was informed by the SBI that compliance of policy has to be ensured and if any clarification is needed, the same may be referred to them. It was also indicated to place the guidelines before the Executive Committees of the respective banks. The guidelines contemplated vide proceedings dated 11-5-1990 of the SBI were placed before the Executive Committee of the respondent-bank and the Executive Committee has approved the said promotion policy on 25-5-1990 and the same was circulated to various bank offices vide proceedings dated 26-5-90. The first paragraph of proceedings dated 11-5-1990 of the SBI indicates as under:
"We enclose, for your information and necessary action, a copy of the promotion policy which has been finalised by us in consultation with the Associate Banks Officers' Association. The promotion policy may please be put up to the Executive Committee of the Board of Directors of your bank immediately."
Thus, it is clear that the promotion policy has been evolved after consultation with the Associate Banks Officers' Association, which should come into force, in respect of promotions to MMGS-II, MMGS-III and SMGS-IV with effect from 1990. Insofar as promotion policy from JMGS-I to MMGS-II is concerned, two channels were kept open. Insofar as first channel (40% of vacancies) is concerned, Clause (a) of the policy stipulates six years of service (including period of probation) as officer in JMGS-I as on first August of the relevant year. Clause (b) provides one year's operational experience as Field Officer/Accountant/Deputy Manager/Manager of a Division/Branch Manager. It is further mentioned therein that the associate banks will have to ensure that all eligible officers are exposed to one year's operational experience before they are due. The second channel for promotion from JMGS-I to MMGS-II is:
"Merit List:
Based on the marks obtained by the officer on the various parameters detailed below, a final merit list will be prepared.
Written test :30 marks
Performance :30 marks
appraisal
Confidential reports -10 marks to be given on
the basis of overall reports for the last 3 years.
4 for average
6 for above average
8 for good
10 for excellent
20 marks to be given on the basis of overall
performance:
8 for average
12 for above average
16 for good
18 for excellent
Interview :30 marks
CAIIB :10 marks (Part-I.......4 marks
Both Parts: 10 marks
----------------
100 marks
----------------
40% of the total vacancies in a year will be reserved under this category.
14. Likewise, promotion policy from MMGS-II to MMGS-III brought out, reads as under:
"PROMOTION POLICY FROM MMGS-II TO MMGS-III:
1. The Promotion to MMGS-III will continue to be based on a system of performance appraisal and interview of the eligible officers.
2. The eligibility criteria will be as follows:-Officers with a minimum 5 years of satisfactory service in MMGS-III as on 1st of the relevant year will be eligible for promotion.
3. Every officer should have completed satisfactory line assignment for a period of 2 years before he is considered for promotion. No relaxation, whatsoever, will be permitted. However, the promotion of such officers, who have not completed their line assignment of 2 years as on the date of promotion, will be subject to their completing the same immediately after their promotion. The promotion or otherwise of such officers will be reviewed by the competent authority as soon as they have completed line assignment of 2 years and appropriate orders passed. Such officers will be confirmed only after they have completed satisfactory line assignment of 2 years. However, their confirmation will be retrospective i.e., after one year from the date of their promotion.
4. The existing stipulations regarding date of eligibility, date of promotion, period of probation, rural posting, sealed cover procedure, etc., will remain unchanged."
15. Likewise, promotion policy from MMGS-III to SMGS-IV reads as under:
"1. Officers who have completed a minimum of 5 years of service in MMGS-III as on 1st August, of the relevant year will be eligible for promotion to SMGS-IV.
2. The existing stipulations regarding date of eligibilty, date of promotion, period of probation, sealed cover procedure, etc., will remain unchanged."
16. Thus, a reading of promotion policy evolved by the SBI, in consultation with the Associate Banks Officers Association, would go to show that for promotion to SMGS-IV, the only requirement contemplated is that 'officers who have completed a minimum of five years of service in MMGS-III as on 1st August of the relevant year will be eligible'. The other requirement i.e., the existing stipulations regarding the date of eligibility, date of promotion, period of probation, sealed cover procedure, etc., will remain unchanged. Insofar as the other categories are concerned, apart from the seniority, other modes are indicated. This promotion policy was approved by the Executive Committee of the respondent-bank on 25-5-1990 and a circular dated 26-5-1990 has been brought out. A reading of circular dated 26-5-1990 and the annexures thereto viz., promotion policies to MMGS-II, MMGS-III and SMGS-IV, would indicate that the Executive Committee of the respondent-bank has approved in toto the promotion policy indicated to all grades/scales upto SMGS-IV from 1990 and onwards. Thus, having accepted the SBI's guidelines for effecting promotions from MMGS-III to SMGS-IV, I am of the view, the respondent-bank cannot opt for a different policy. As per the guidelines issued by the SBI and as seen from Clause (5) of General Guidelines issued in circular dated 26-5-1990 by the respondent-bank, the promotion policy will remain in force for a period of five years subject to review after 3 years or earlier if necessitated due to Government of India guidelines. Admittedly, there are no guidelines issued by the Government of India for changing the said policy within one year. In the absence of any guidelines issued by the Government of India, the respondent-bank cannot alter or change the policy to its liking. The subsequent changes brought out by the respondent-bank in circular dated 12-8-1991 is contrary to Regulation 17 of the Service Regulations.
17. Petitioners in W.P.No. 11167/90 are mainly questioning the criteria adopted by the respondent-bank over and above the requirements contemplated for promotion for MMGS-III to SMGS-IV as per circular dated 26-5-1990, which is in accordance with circular dated 11-5-1990 of the SBI. From the counter filed by the respondent-bank, it is clear that they have not only taken into consideration the requirements contemplated under the circular dated 26-5-1990, but also adverted to the procedure of performance appraisal and interview, which is not contemplated in the promotion policy circulated on 26-5-1990. It is pertinent to note that after filing of W.P.No. 11167/90, the respondent-bank has addressed a letter dated 12-9-90 to the SBI, paragraph 3 of which reads as under:
"The Bank's stand on the promotion policy has been challenged by a section of officers through writ petitions in Andhra Pradesh High Court. The details thereof were advised to you through our following letters/ telexes:"
A clarification was sought in the last paragraph, which reads as under:
"For Promotion from MMGS-III to SMGS-IV. The Regular Promotion Policy is silent on the selection process. The selection process under the ad hoc promotion policies for promotion from MMGS-III to SMGS-IV for the past few years provided for (i) performance appraisal and (ii) assessment of potential for taking up Senior Management responsibilities through interview. According to our understanding, the Regular Promotion Policy has tacitly approved continuance of the selection process inasmuch as in the policy for promotion to SMGS-IV the relevant provision "The existing stipulations regarding date of eligibility, date of promotion, period of probation, sealed cover vacancy procedure, etc., will remain unchanged" covers this aspect though this is not spelt out categorically. Due to the circumstances arises, it would be advisable to spell out the selection process for promotion from MMGS-III to SMGS-IV under Regular Promotion Policy also."
The letter concludes as under:
"We shall be glad to receive your advices in the matter."
18. Pursuant to this letter, the SBI sent a reply dated 13-10-1990 to the respondent-bank. Item (iii) of para 2 of the said letter reads:
"(iii) Promotions from MMGS-III to SMGS-IV. We do not agree with your observation that the Regular Promotion Policy is silent on the selection process. While the promotion policy forwarded to you vide our letter No. SBD/1307 of the 11th May, 1990 contain guidelines in regard to , eligibility for promotions to various scales/grades, there was no change in the detailed guidelines in regard to selection procedure which was already being followed in your Bank. It was necessary that the whole promotion policy including the selection procedure, should have been put up to the Executive Committee. Alternatively you should have mentioned in the EC memorandum that there was no change in the selection procedure already approved by us. We shall be glad if the matter is examined in consultation with your Law Department and appropriate steps taken to regularise the position for future. In this connection, it occurs to us that while calling for recommendations for promotion, you would have issued a circular; we shall be glad if you will please advise us whether there is any mention about the selection procedure in the circular."
19. Thus, there is no mention about separate selection procedure to be adopted for SMGS-IV other than the one indicated in circular dated 11-5-1990. The circular dated 26-5-1990 contemplates various methods to be followed as far as promotions from JMGS-I to MMGS-II and MMGS-II to MMGS-III. Insofar as promotion from MMGS-III to SMGS-IV is concerned, the circular dated 26-5-1990 does not indicate any special procedure to be followed except indicating a minimum requirement of five years of service in MMGS-III and the requirement contemplated in Clause (2) of the circular. The sum and substance of the letter dated 13-10-1990oftheSBI would indicate that the entire promotion policy including the selection procedure should have been placed before the Executive Committee, or alternatively any change indicating other than the process contemplated in circular dated 11-5-1990 should have figured in the memorandum placed before the Executive Committee, so that the Executive, Committee could have taken a decision on the entire aspect. The letter further goes to show that the matter could be examined in consultation with the Law Department and appropriate steps could be taken to regularise the promotions for future. In the absence of any proper guidelines in this aspect as suggested by the SBI vide letter dated 13-10-1990, in my opinion, it is not open to the respondent-bank to bring about modifications and contemplate some other requirement for promotion to SMGS-IV. A series of circulars starting from 17-1-1983, 16-10-1986, 30-7-1988 and 4-7-1989 issued by the respondent-bank would indicate that no permanent policy was followed in ad hoc promotions till 1989. For the year 1990 and onwards, after great device and consultation, regular policy has been evolved at the national level by the SBI in consultation with the All India Banks Officers Associations, which has been circulated to all the associate banks. In the absence of a permanent policy, the banks were adopting different policies for ad hoc promotions in a way suitable to them as per their requirement. But, when once a regular promotion policy has been evolved in consultation with the Associate Banks Officer's Associations, in my view, it is binding on the other associate banks also. If any associate bank intends to bring about any further additions, they must necessarily have to obtain approval of the SBI as contemplated under Regulation 74 of the Service Regulations.
20. Sri Srinivasa Murthy, learned counsel for the respondent-bank, has strenuously argued that the circular issued by the SBI on 11-5-1990, which is adopted by the SBH, is in the nature of guidelines and, therefore, the respondent-bank is not obliged to follow that circular in strict adherence. Even otherwise, no prejudice is caused to the petitioners, as every aspirant has to undergo the rigour of test.
21. Sri Ramakrishna Reddy, learned counsel for the petitioners, on the contrary states that the guidelines issued by the SBI insofar as promotion policy is concerned, are binding on the associate banks and, therefore, the associate banks have to necessarily follow the suit and cannot invent a different method, which has no statutory approval.
22. In B.S. Minhas v. Indian Statistical Institute, the Supreme Court, while dealing with Bye-law 2 of the Statistical Institute Bye-laws and the effect of non-compliance with that Bye-law, held:
"The next question that arises for consideration is whether the appointment of respondent No. 4 as Director of respondent No. 1 is illegal because of non-compliance with Bye-law 2. Bye-law 2 does require that before appointment, the vacancy in the post of Director should be suitably published. In the instant case, it is admitted on both sides that no publicity whatsoever was given in respect of the vacancy. The contention of Shri Garg, however, is that the bye-law having no force of statute, non-compliance with its requirement cannot in any way affect the appointment of respondent No. 4 as Director of respondent No. 1. Shri Tarkunde, however, contended that assuming that the bye-law is not statutory, even so respondent No. 1 was bound to comply with it. In support of his contention he strongly relied upon Ramana Dayaram Shetty v. International Airport Authority of India . The Court in that case held (at P.1635 of AIR):
"It is a well-settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule was enunciated by Mr. Justice Frankfurter in Vitarelli v. Seaton, (1959) 359 US 535:3 L Ed 2d 1012) where the learned Judges said:
"An executive agency must be rigorously held to the standards by which it proffesses its action to be judged. Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with that sword."
23. The Supreme Court further held:
"In view of the pronouncement of this court on the point it must be held to be obligatory on the part of respondent No. 1 to follow the bye-laws, if the bye-laws have been framed for the conduct of its affairs to avoid arbitrariness. Respondent No. 1 cannot, therefore, escape the liability for not following the procedure prescribed by Bye-law 2."
24. Taking clue from the above decision, I am of the view that the policy evolved for effecting promotions as set forth by the SBI, may be a sort of guidelines as contended by the learned counsel for the respondent-bank, yet it is binding on the respondent-bank and has to strictly adhere to the guidelines.
25. In Amratlal v. State, AIR 1970 Guj. 260, dealing with the question of grant-in-aid to educational institutes, the Gujarat High Court held:
"Therefore, in the present case the petitioners on the proof of substantial compliance with the rules of the Code, are entitled to obtain grant although under the Code the grant has to be paid at the discretion of the sanctioning authority. The discretion has to be exercised by the authority in a reasonable and bona fide manner and not arbitrarily and capriciously. Even if the rules relating to the grants are mere executive instructions one cannot forget that the Government is dealing with the public funds. We are not in ancient days when the grant made by the Government in aid to educational institutions was regarded as bountry. For disbursing grant the Government has framed rules and if the rules are not complied with, the claim of the petitioners to grant cannot be rejected."
26. To meet the contention of Sri Srinivasa Murthy that Clause 2 of the policy for promotion from MMGS-III to SMGS-IV, the word "etc.," has been specifically used and, therefore, that word connotes 'holding of interview' also. Sri Ramakrishna Reddy has placed the decision of the Madras High Court in Rajagopala Pandarathar v. T. Pillai, AIR 1923 Mad. 511 by pointing out as to how the word "etc.," is to be construed. What is flown from the above decision is the word should be restricted to things of same nature as those which have been already mentioned. If a mention is made about all kinds of trees, etc. the residential buildings cannot be taken to fall under the category of 'trees' when it is said all trees etc. Therefore, Clause 2 of the guidelines indicated for promotion to SMGS-IV category only contemplates date of eligibility, date of promotion and period of probation. The word 'etc. cannot be read as to conveying meaning of 'holding interview'. Interview and performance appraisal are major policies deviating from the guidelines prescribed. Therefore, such a deviation is not intended in terms of Clause 2. I am in complete agreement with the submission made by the counsel for the petitioners on this aspect. While interpreting the word 'etc. totally a new concept cannot be inferred from such a use of the word. As noted, the promotion policy for each category is indicated. Therefore, when these guidelines are framed for JMGS-I, MMGS-II and MMGS-III, the respondent-authorities are not permitted to deviate from what is contemplated in the policy circulated vide circular dated 11-5-1990, which tends to give scope for arbitrariness and 'pick and choose' ideology. Therefore, viewed from any angle, in my considered opinion, the respondent-bank has to necessarily follow the promotion policy evolved by the SBI in terms of its circular dated 11-5-1990, which has the approval of the Executive Committee of the respondent-bank dated 25-5-1990 which was circulated on 26-5-1990. On this aspect, there cannot be a second opinion and the respondent-bank could ill-afford to overlook the policy enunciated the adopt a different method suiting to the requirements of the authorities.
27. In cases of promotions, though various methods are being adopted by different authorities, the concept of eligibility and suitability are also vigorously canvassed at some end. There cannot be any doubt as far as eligibility is concerned and in some cases, the suitability could also be looked into by certain methods, such as referring to confidential reports, etc. The requirement contemplated in effecting promotion from MMGS-III to SMGS-IV would undoubtedly disclose that the minimum eligibility is five years of service in MMGS-III and the second limb of the requirement is that the existing stipulations regarding date of eligibility, date of promotion, period of probation, sealed cover procedure, etc., will remain unchanged. Apart from this, when cases of eligible candidates come up for consideration before the Committee, the Committee would necessarily look into the confidential reports, which reflect past performance. If, in the opinion of the authorities the confidential reports of an employee are not in a required degree, it is well within the purview of the authorities to defer the promotion of that employee.
28. During the course of arguments, it is made known to me that even if promotions are effected to SMGS-IV, certain period is prescribed for probation and a probationer has to successfully complete that period. It is true clear that even if an employee is promoted to a higher category, if, in the opinion of the authorities, that employee has not lived upto the expectations during probation period, it is open to the authorities to revert him. That being the option available under service conditions, the argument that promotion to higher category requires more check and tests to filter, in my view, cannot be accepted.
29. In order to judge a person's capability, various channels are available. Unless and until a person is given an opportunity to shoulder the responsibility, it cannot be said that, that person would not live upto the expectations.
30. May be, a system exposed to various in-built methods, the much deserving may not be rewarded, for the system itself tends to depend upon the pleasure of few, who may have their likes and dislikes. This is not unknown to our society. Therefore, what is required is a general policy agreed to and such policy has been evolved in consultation with the All India Banks Officers Association. The respondent-bank cannot have any grievance on the policy contemplated vide circular dated 11-5-1990. The standard set forth for suitability, in my opinion, is an intelligent device brought out by certain vested interests to eliminate few, who are not of their liking. I may, at this point of time, say that the suitability criterion, now being canvassed, look to be a myth, for, such suitable personnel who are rewarded and picked up to higher pedestal are close confidants of higher-ups who are either party to scandals and share the benefit or rewarded in other ways. Day-in and day-out we read about the scandalous activity being carried on by few who have access to all sources. The recent banks scam has shaken the economy of the country. Who is responsible for this? What does it convey when it is said that a person, though eligible to hold the post, is not suitable for it? The hidden meaning of such words has to be understood by every citizen and particularly the Courts. Can we not understand the adjectives added to the term 'suitability'? Therefore, the experience we have, is sufficient to repell such strange arguments.
31. The requirement of five years of service is one of the criteria for further promotion to SMGS-IV. The respondent-bank has fixed first August as the cutoff date for the relevant year as to the seniority date to be reckoned with. Insofar as 1992 is concerned, I am given to understand that 31st December has been fixed as the cut-off date. When promotions are to be effected for the year 1990, taking into account the cut-off date as 1-8-1990, the list of such candidates who have completed five years of service in MMGS-III could be placed before the selection committee along with confidential reports, etc. If the committee is of the opinion that a particular officer cannot be considered for promotion on the basis of his past performance, etc., his promotion could be deferred to such period. This would also reduce the heart-burning among the officers who have put in lot of experience and are prepared to accept the challenge that would come on their way.
32. Further, it is interesting to note that while communicating the policy to be followed for promotion from the year 1990 for all categories, the SBI vide their letter dated 11-5-1990 indicated at paragraph 2 as follows:
"In this connection, we wish to advise that in terms of the promotion policy, promotions to the aforesaid grades are to be effected from 1st August every year as hitherto. We shall, therefore, be glad if you will please initiate such steps as are considered necessary to ensure that promotions for the year 1990 to the above mentioned grades are completed on or before 1st August, 1990 positively. As you are aware, in terms of the Government guidelines, promotions cannot be given from a retrospective date and as such, it will be absolutely necessary to ensure that the process of promotions for the current year is completed well before 1st August, 1990."
33. A reading of the above paragraph would indicate that promotions cannot be given with retrospective effect. It is the specific allegation of the petitioners that respondents 16 to 20 in W.P.No. 11167/90, though not completed five years of service in MMGS-III as on the cut-off dated 1-8-1990, were given promotions in the year 1987 with effect from August, 1985. This, in my view, is contrary to the sum and substance of the circular dated 11-5-1990 of the SBI. In the counter it is admitted that promotions to respondents 16 to 20 to MMGS-III was with retrospective effect viz., 1-8-1985 though promotions were given to them in the year 1987. May be, the argument advanced in this behalf by Sri E. Manohar, learned counsel for respondents 3 to 20, makes it clear that promotions were effected much earlier. Therefore, the observation made in the letter dt. 11-5-90 may not be relevant. Yet, it is to be seen, the contest under which retrospective promotions were given to respondents 16 to 20. I have no doubt in my mind to hold that in order to give special benefits to respondents 16 to 20, they were promoted with retrospective effect. Such a device, in no mean words, could be understood that the management has not conferred any special treatment to respondents 16 to 20. Therefore, the excessive interest shown by the management to respondents 16 to 20 indicates a selective attitude towards few, which is an unhealthy trend. The submission of Sri Srinivasa Murthy that meritorious persons were rewarded and, therefore, there is no illegality in such retrospective promotions. No record is placed before me to show how meritorious respondents 16 to 20 were. Therefore, I am unable to accept the submission of the counsel on this aspect. This action of the respondent-bank gives scope to accept the contention of the petitioners that in order to favour respondents 16 to 20, though not eligible, the respondent-bank has resorted to this method. I, therefore, hold that respondents 16 to 20 in W.P.No. 11167/90 were not eligible even for consideration for promotion to SMGS-IV as on the date 1-8-1990. If at all they acquired the eligibility for promotion to SMGS-IV, that would be after completion of five years of service in MMGS-III with effect from 1987. In fairness, I must say that respondents 16 to 20 would be eligible for promotion for the post of SMGS-IV for the year1992, as 31-12-1992 is the cut-off date, along with such others, who by that time complete five years of service in MMGS-III.
34. Sri Srinivasa Murthy, learned counsel for the respondent-bank, has placed before me the decision of this Court in W.P.No. 932 of 1988 dt.3-9-1992. Placing reliance on the above decisions, Sri Murthy has contended that the question as to whether promotions are to be given only on the basis of seniority, has bean decided by this Court and, therefore, the present writ petitions deserve to be dismissed on the same ground. I am not inclined to accept the contention. The petitioner therein sought the relief that he is entitled to be promoted to Senior Scale-IV with effect from 1-8-1985, the date on which he became entitled to. This case has no relevance to the facts of the instant case, as in my view, there was no approved policy contemplated for promotions, as that is available from the year 1990 onwards, as per circular dated 11-5-1990 of the SBI. In the case on hand, we are dealing with a matter where a national policy has been evolved contemplating certain requirements to each category in consultation with the Associate Banks Officers' Association and, therefore, the above decision cannot be applied to the facts of this case.
35. Sri Srinivasa Murthy has taken me through a catena of decisions viz., Indian Airlines Corporation v. Copt. K.C. Shukla, ; Lila Dhar v. State of Rajasthan, : R.S. Dass v. Union of India, : State Bank of India v. Mohd. Mynuddin, and A.R. Antulay v. R.S. Nayak, , indicating that the fixation of percentage of marks for interview has been held valid by Supreme Court. Sri Murthy has drawn my attention to Article 141 of the Constitution of India and reminded me that the decisions rendered by the Supreme Court are binding on the High Courts. I have no reasons to differ with the ratio decidendi laid down by the Supreme Court in the above cases. I am on the question of the power of the respondent-bank in not following the promotion policy contemplated in terms of circular dated 11-5-1990, which has the approval of the Executive Committee of the bank. If the management of the respondent-bank is allowed to deviate from the policy by picking up persons of their liking, there will be anarchy giving scope to mal administration. After all, the banks are nation's property; they are not private estates of few to have a policy suiting to their interest.
36. As held by the Supreme Court in Jaisinghani v. Union of India, , any power exercised by a particular authority has to be within the defined limits. Any decision deviating from the earlier policy, which would effect a category of persons, should be known to them. The Supreme Court has in no mean words said in Delhi Transport Corporation v. D.T.C. Mazdoor Congress, :
"In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within defined limits. The rule of law form this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is."
Therefore, the authorities should indicate the percentage of marks they intend to allot for each faculty as is made clear in the circular dated 11-5-1990 for other categories. The policy cannot be vague.
37. The respondent-bank, by way of effecting amendments to promotion policy, in circular No. PER/91-92/34 dated 12-8-1991, which is impugned in W.P.No. 12510 of 1991, has brought out a major policy changes without regard to the SBI guidelines as contemplated in Regulation 17 of the Service Regulations, 1979. As per Regulation 74, the State Bank guidelines are to be construed as a decision of Executive Committee until it is varied. Admittedly, there is no variation in the guidelines issued by the SBI. The new policy as brought out in circular dated 12-8-1991 indicates that performance appraisal and interview will carry equal weightage. There is nothing indicated as to the number of marks each facet would be allotted, so as to enable the competitor to know on hand as is indicated to other categories.
38. Therefore, I am inclined to hold, in the absence of clear policy and proper allocation of marks, that scope for arbitrary exercise of power by the management is more in evidence. Such vague policies, depended upon the whims and fancies, cannot be allowed to sustain. Therefore, the circular dated 12-8-1991 issued by the respondent-bank deviating from the policy evolved in terms of circular dated 11-5-1990, is set aside.
39. Sri Ramakrishna Reddy, counsel for the petitioners, has placed before me the unreported decision of Rajasthan High Court in Civil Nos. 1562/87, 3964/87 and 2293/89 dt.26-8-1991, wherein it is held that in the absence of clear policy and allocation of marks, such a vague policy would tend to vest arbitrary power in the hands of management and, therefore, such policy was struck down. The Supreme Court in R.S. Dass v. Union of India (6 supra) has observed that in the absence of any objective criteria, there is likelihood of subjective consideration in the circumstances of genuine persons in selection process.
40. Sri Manohar, counsel for respondents 3 to 20, states that the petitioners have failed to show any rule to indicate that promotions are to be effected only on the basis of seniority. I am afraid, this submission falls flat in view of the guidelines issued by the SBI, which has the approval of the Executive Committee of the respondent-bank. Therefore, such an approval makes it clear that promotion policy as contemplated in circular dated 11-5-1990 for each category has to be followed. No further rule is necessary. Earlier to 1990, no guidelines were prescribed. It was left to individual banks. The submission that when appeal is provided, the petitioners cannot take recourse to writ proceedings, in my view, cannot be accepted in the teeth of the decision of the Constitution Bench of the Supreme Court in A.V. Venkateswaran v. R.S. Wadhwani, .
41. In view of my detailed discussion, both the points are held against the respondent-bank. Consequently, I hold that the entire selection process of effecting promotions to SMGS-IV from MMGS-III, adopted by the respondent-bank for the year 1990 and onwards, is contrary to the guidelines issued by the State Bank of India in its circular dated 11-5-1990, as approved by the Executive Committee of the respondent-bank on 25-5-1990, and, therefore, such selection process cannot sustain. Accordingly, the promotions of respondents 3 to 20 in proceedings dated 9-7-1990 of the respondent-bank are set aside.
42. Having set aside the selection process, I direct the respondent-bank to fall back to the procedure contemplated for effecting promotions to SMGS-IV from MMGS-III as per the guidelines issued by the State Bank of India in its circular dated 11-5-1990, as approved by the Executive Committee of the respondent-bank in term's of its circular dated 26-5-1990 and consider the aspect of promotions yearwise starting from 1990 taking 1-8-1990 as the cut-off date for 1990; 1-8-1991 for 1991 and 31-12-1992 for 1992, for the purpose of seniority.
43. Though Sri Ramakrishna Reddy, counsel for the petitioners, sought a positive direction to the respondent-bank to promote the petitioners immediately from MMGS-III to SMGS-IV in accordance with the seniority, I am not inclined to concede to this request, as I have directed the respondent-bank to have a fresh look at the promotion policy from MMGS-III to SMGS-IV for the year 1990 and onwards in accordance with the circular dt.26-5-1990 of the respondent-bank.
44. In the result, both the writ petitions are allowed, the proceedings in CIR No. PER/90-91/26 dated 9-7-1990 of the respondent-bank is set aside; the circular dated 12-8-1991 in PER/90-91/34 of the respondent-bank is held as contrary to the guidelines and, therefore, is quashed. No order as to costs.
W.P.No. 8623 of 1992:
45. In this writ petition, a direction is sought to the respondents to promote the petitioners from MMGS-1II to SMGS-IV as per the promotion policy contemplated in terms of circular No. PER/90-91/15 dated 26-5-1990 of the respondent-bank. The petitioners have also assailed the validity of circular dated 12-8-1991 brought out by the respondent-bank by incorporating new condition contrary to the guidelines issued with regard to promotion policy. The other ground made out by the petitioners is that the respondent-bank is adopting a different device while considering promotions to SMGS-IV. It is stated that though promotions to SMGS-IV are based on seniority, the management is picking up persons of their choice under the cover of suitability. The respondent-management is favouring few, who are the 'yesmen', not only in promotions, but also in making appointments in 'officiating position'. The officiating position also carries higher pay scale and other benefits. Therefore, the petitioners seek a writ of mandamus declaring the action of the respondent-bank as illegal, arbitrary and violative of fundamental rights, and consequently a direction to appoint them in officiating position as per the seniority list, till regular promotions are made in terms of circular dated 26-5-1990.
46. I have already dealt with the question pertaining to promotion policy in terms of circular dated 26-5-1990 and also the effect of the revised promotion policy brought out by the respondent-bank in terms of proceedings dated 12-8-1991, in W.P.Nos. 11167/90 and 12510/91. Therefore, the finding on this aspect covers the field. The only aspect to be decided in this writ petition is whether the respondent-bank could be directed to appoint the petitioners in 'officiating; position' in SMGS-IV till there posts are filled up by following proper procedure.
47. The petitioners have brought out specific instances of discrimination meted out to them by the respondent-bank in appointments in officiating position ignoring the claims of petitioners. It is stated that some of the juniors have been appointed in officiating position. The respondent-bank no doubt admits such appointments, but contends that the persons who were appointed in officiating position were found more suitable than the petitioners and, therefore, such an action is not arbitrary. It is also the contention that the: respondent-bank is competent to follow its own method of selection in making appointments - whether officiating or permanent - and the courts should not bother about what is happening in the banks. The respondent-bank expects that the managements of nationalised banks have privilege to evolve and adopt policies of their own in making appointments and promotions. As I have categorically held in W.P.Nos. 11167/90 and 12510/91 that the respondent-bank cannot deviate from the promotion policy as evolved in terms of circular dated 2:6-5-1990. Therefore, the criterion as indicated hereinabove has to be followed while effecting promotions from MMGS-III to SMGS-IV. The same criterion has to be followed even in making appointments in officiating position. The respondent-bank cannot adopt 'pick and choose' method.
48. It is noticed that this Court in WPMP No. 10645/92 in this writ petition, by order dated 24-7-1992, directed the respondent-bank to make officiating arrangements for the vacancies of SMGS-IV in terms of guidelines No. 4 (a) of internal circular No. PER/GR/IV/9346 dated 25-1-91, against which the matter was carried before a Division Bench of this Court in Writ Appeal No. 1010/92 by the respondent-bank. It is represented that the respondent-bank has withdrawn the said writ appeal, which was dismissed as withdrawn by the Division Bench of this Court.
49. Since I have set aside the promotions effected by the respondent-bank vide proceedings dated 9-7-1990 and also quashed the circular dated 12-8-1991 and I am directing the respondent-bank to effect promotions to the posts of SMGS-IV in accordance with the promotion policy contemplated in terms of circular dated 26-5-1990, the entire process may take considerable time. Therefore, as a matter of stop-gap arrangement also, the respondent-bank has to follow the procedure contemplated in terms of internal circular dated 25-1-1 991 while making arrangements. The respondent-bank cannot disown their own policy in a contingency of this nature. Accordingly, the respondent-bank is directed to make officiating arrangements to SMGS-IV posts in terms of guidelines dated 25-1-1991.
50. The writ petition is accordingly allowed. No order as to costs.