Holding

The bank's promotion policy violated the statutory seniority‑cum‑merit requirement, so the appellant must be promoted prospectively as a Field Supervisor.

Summary

The appellant, a clerk‑cum‑cashier of Rewa Sidhi Gramin Bank, challenged the promotion of his juniors, arguing that the bank's promotion policy violated the seniority‑cum‑merit requirement under the Regional Rural Banks (Appointment & Promotion of Officers and other Employees) Rules, 1988. The High Court had earlier quashed the juniors' promotions but later dismissed the appellant's petition on the ground that he failed to obtain the minimum interview marks. The Supreme Court examined whether the bank's policy of assigning weightage to seniority, performance, postings and interview, and setting a minimum interview score, complied with the statutory seniority‑cum‑merit principle. It held that the policy effectively applied merit‑cum‑seniority, not seniority‑cum‑merit, because it lacked a minimum standard for promotion and relied on comparative marks. Consequently, the Court directed the bank to promote the appellant prospectively as a Field Supervisor, placing him above his junior, with pay fixed retrospectively, exercising its power under Article 142.

Issues considered

The promotion policy of the bank complies with the seniority‑cum‑merit principle prescribed by the 1988 Rules.
Whether a minimum interview score can be a condition for promotion under seniority‑cum‑merit.
Whether the bank's repeated use of a merit‑cum‑seniority approach violates the statutory rules.
Whether the Supreme Court may order prospective promotion under Article 142.
Whether the appellant is entitled to promotion despite not meeting the interview minimum.

Legislation cited

Constitution of Indias. Article 142
Regional Rural Banks Act, 1976s. 17, s. 29

Subjects

promotionseniority‑cum‑meritregional rural banksinterviewservice lawArticle 142writ petitioncontemptjudicial review

Judgment

A HARIGOVIND YADA V
v.
RFWA SIDHI GRAMIN BANK & ORS.

MAY 9, 2006

B [B.N. SRIKRISHNA AND R.V. RAVEENDRAN, JJ.]

Service Law:

Regional Rural Banks (Appointment & Promotion ofOfficers and other

c
Employees) Rules, 1988: Rules 5 and 10.

Promotion policy-Seniority-cum-merit- -Interview --Importance of-
Weightage to be given- -Clerk-cum-cashier-Appellant employee's juniors
were prom1Aed-Bu1 1he appellant employee was not promoted-Promotion
-
policy was hased on the principle ofseniority-cum-merit---Appellant employee
filed writ petition challenging the promotion ofhis juniors--High Court held
D that the promotion;; had been made not on the basis of seniority-cum-merit
but on the basis of merit-cum-seniority--Promotion a/juniors quashed---On
reconsideration the employee was still not promoted as he failed to secure
the prescribed minimum marks in the interview--Correctness of-Held:
Interviews can be held and assessment of performance can be made by the
E employer if' connection with promotions-But that can be only to assess the
minimum necessary merit--But where the procedure adopted, does not
provide the minimum standard for promotion, but only the minimum
standard for interview and does 1he sdeclion wilh n:ference to comparative
marks, it is contrary to the Rule of 'seniority-cum-merit· -- Promotion of
Appellant employee s juniors set aside- However, with a view to doing
F complete justice employer directed to promote the employee prospectively
and place him ahove his juniors·--Constitution of India, 1950, Art. 142.

The appellant and the third respondent were working as clerk-cum-
cashiers with the first respondent Bank. The appellant was at serial No.
9 and third respondent was at serial No. to in the seniority list of senior
G clerks-cum-cashiers. There was no dispute that the third respondent was
junior to the appellant in the cadre of clerk-cum-cashier. The appellant's
juniors were promoted as Field Supervisors. The appellant was not
promoted.

H The appellant filed a writ petition before the High Court challenging
116
HARIGOVIND YADA V v. REWA SIDHI GRAMIN BANK 117

the promotion of his juniors on the ground that the respondent-Bank had A
failed to make promotions on the basis of seniority-cum-merit prescribed
under the Regional Rural Banks (Appointment & Promotion of Officers
and other Employees) Rules, 1988 and had made promotions on the basis
of merit-cum-seniority contrary to the Rules.

The High Court held that the promotions had been made not on the B
basis of seniority-cum-merit but on the basis of merit-cum-seniority.
Consequently, the promotion of the third respondent was quashed with
a direction to the Bank to consider the case of the appellant for promotion
to the post of Field Supervisor along with other eligible candidates.

As no action was taken in pursuance of the said decision, the appellant C
filed a contempt petition. The said petition was disposed of by the High
Court recording the assurance of the Bank that the case of the appellant
would be considered and appropriate orders would be passed within one
month. However, appellant was not promoted.

The appellant, therefore, filed a fresh writ petition before the High D
Court. The High Court dismissed the writ petition holding that the
appellant was not promoted, as he failed to secure the prescribed minimum
marks in the interview. Hence the appeal.

Allowing the appeal, the Court
E
HELD: 1. Interviews can be held and assessment of performance
can be made by the Bank in connection with promotions. But that can
be only to assess the minimum necessary merit. But where the procedure
adopted, does not provide the minimum standard for promotion, but
only the minimum standard for interview and does the selection with
·reference to comparative marks, it is contrary to the Rule of 'seniority- F
cum-merit'. This aspect of the matter has been completely lost sight of
by the High Court. The respondent-Bank have proceeded on the basis
that the appellant having failed to secure the minimum marks prescribed
for interview, was rightly denied promotion, by ignoring the principle
laid down by this Court in SIVA/AH in regard to seniority-cum-merit. At G
all events, as the promotion policy adopted by the Bank was held to be
illegal in the earlier round of litigation, the Bank could not have adopted
the same policy to again reject the appellant for promotion.
[129-G-H; 130-A)

B. V Sivaiah v. VKAddanki Babu, [1998] 6 SCC 720; Sher Singh v. H
118 SUPREME COURT REPORTS [2006] SUPP. 2 S.C.R.

A Surinder Kumar, [1998) 9 sec 652 and Comptroller and Auditor General
of India v. K.S. Jagannathan, [1986) 2 SCC 679, referred to.

K. Samantaray v. National Insurance Co. Ltd., (2004) 9 SCC 286 and
Syndicate Bank SC & ST Employees Assn. v. Union of India, [1990( Supp.
sec 350, held inapplicable.
B
2. Having regard to the factual background of the case and having
regard to the fact that even under the merit-cum-seniority basis adopted
by the bank the appellant had secured high marks and he was denied
promotion on the ground that he failed to secure minimum marks in the
c interview, there is no need to refer the matter for fresh consideration.
With a view to doing complete justice, in exercise of the power of this
Court under Article 142, the first respondent-bank is hereby directed to
promote the appellant as a Field Supervisor from the date the third
respondent was promoted as Field Supervisor and place him above the
third respondent. However, he will be entitled to monetary benefits
D flowing from such promotion only prospectively, though the pay is to be
re-fixed with reference to the retrospective date of promotion. (132-F-G)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1153 of2003.

From the Judgment & Order dated 23.8.2001 of the High Court of
E
Judicature at Jabalpur in LP.A. No. 224/2000.

Yivek Tankha, S.S. Chauhan, S.P. Kale, H. Pathak and T. Mahipal for
the Appellant.

F T.L. Viswanatha Iyer and T.G. Narayanan Nair for the Respondent.

The Judgment of the Court was delivered by

RAVE END RAN, J. :

G The appellant and the third Respondent are working as clerk-cum-
cashiers with the first respondent Bank (Rewa Sidhi Gramin Bank). The
appellant is at serial No.9 and third respondent is at serial No. I 0 :n the
seniority list of senior clerks cum cashiers published on 31.7.1988. There is
no dispute that the third respondent is junior to appellant in the cadre of clerk-
H cum-cashier.
HARIGOVIND YADAV v. REWA SIDHI GRAMIN BANK [RAVEENDRAN, J.] 119

2. The promotions of employees of the first Respondent Bank (for short A
'the Bank') are governed by the Regional Rural Banks (Appointment &
Promotion of Officers and other employees) Rules, 1988 (for short 'rules')
made by the Central Government in exercise of the power conferred by
Section 29 read with section 17 of the Regional Rural Banks Act, 1976. Rule
5 provides that all vacancies shall be filled by deputation, promotion or by
B
direct recruitment in accordance with the provisions contained in the second
Schedule. Rule 10 requires the Board of Directors of each Regional Rural
Bank to constitute from time to time Staff Selection Committees in the
manner provided therein for the purpose of selecting candidates for
appointment by direct recruitment or promotion to the posts referred to in
the second Schedule. It also requires the Staff Selection Committee to follow C
the procedure as determined by the Board for selecting the candidates for
appointment or promotion in accordance with the guidelines issued by the
Central Government from time to time.

3. Entry 5 of the second Schedule to the Rules relates to Field D
Supervisors. It provides the source ofrecruitment as 50% by direct recruitment
and 50% by promotion on the basis of seniority-cum-merit (from amongst
confirmed senior clerk-cum-cashiers, junior clerk-cum-cashiers, or clerk-
cum-typists, stenographers and steno typists with the prescribed minimum
periods of service). For direct recruitment, the mode of selection is 'written
test and interview'. The method prescribed for ascertaining the minimum
E
necessary merit required for promotion by seniority-cum-merit is 'interviews
and assessment of perfonnance reports for the preceding 3 years'.

4. The promotions were made by the Bank in accordance with the
promotion policy contained in the circular dated 2.2.1989. The circular stated F
the object of the promotion policy thus:

"The object of the policy which is based on the principle of
Seniority-cum ··merit is to provide motivation and ensure carrier
movement for Bank Staff. Apart from seniority, merit based on
performance coupled with weightage for placement/posting in G
comparatively inconvenient areas, will be the detennining factors
for promotion."

Chapter 3 of the said promotion policy dealing with promotions to the post
of Field Supervisors is extracted below : H
120 SUPREME COURT REPORTS (2006] SUPP. 2 S.C.R.

A "FROM SENIOR CLERK/CASHIER OR JUNIOR CLERK/
CASHIER OR CLERK/TYPIST OR STENO/TYPIST TO FIELD
SUPERVISOR.

Promotion from Senior Clerk/Cashier or Junior Clerk/Cashier or
Clerk/Typist or Steno/Typist to Field Supervisor subject to satisfaction
B of minimum period of service shall be, at present on the basis of
assessment of his overall performance based on appraisal reports on
him and his potentiality to shoulder higher responsibilities assessed
in the interview duly supplemented by weightage for seniority
placement/posting as detailed herein below :
c Percent weightage for various promotion criteria as mentioned
above will be as follow : -
Total Seniority Posting Posting Perfor- Inter-
Marks at Rural at difficult mance view
D Centres Centres

100 20 IO 5 40 25

3.1 Seniority :

E Two marks for each completed year of service as Senior Clerk/
Cashier and one mark for each completed year of service as Junior-
Clerk/Cashier/Typist/Steno/Typist subject to a maximum of 20
marks.

F 3.2 Posting at rural centres.

Two marks for each completed year of service in rural centre with
a maximum of IO marks.

3.3 Posting at difficult centres.
G
One mark for each completed year of posting at difficult centre
(difficult centres to be identified by the Chairman and approved by
the Board) with a maximum of 5 marks.

3.4 Performance/Appraisal
H
HARIGOVIND YADAV v. REW A SlDHl GRAMIN BANK [RAVEENDRAN, J.] 121

Performance will be assessed through the appraisal reports annually A
received from his superiors in such form as may be specified by the
Chairman from time to time. Marks will be awarded at the rate of
8 marks each for annual appraisal ratings for the appraisal of
preceding 3 years period with the maximum of 24 marks and 16
marks for overall performance of the Staff (maximum 16 marks).
B
Performance, on the basis as stated above, will be assessed by a
Staff Selection Committee constituted by the Board for this purpose
from time to time.

3 .5 Interview :
c
(a) The Staff Selection Committee constituted by the Board for
the purpose of promotion, will also work as Interview
Committee.

(b) · The Maximum marks for interview will be 25. By and large,
the candidates who have been found eligible will be interviewed
D
in respect of (1) Personality (2) Poise and Manner (3) Power
of expression (4) Emotional Stability (5) Job Knowledge
including knowledge of Banking (with reference to the
functions/role of Regional Rural Banks) (6) General Knowledge
(7) Initiative (8) Leadership quality (9) Potential and suitability E
and overall assessment.

3.6. Candidates who have secured less than 40% marks in interview
.. will not be considered for promotion and their names will not be
included in the final merit list.
F
3.7. The list of successful candidates in the order of total marks
obtained will be placed by the Staff Selection Committee before the
Board, duly recommended for consideration for appointments or
promotion."

5. On 3.7.1991 the appellant's juniors were promoted as Field G
Supervisors. The appellant was not promoted. He therefore filed W.P.
No.4485/1993 in the High Court of Madhya Pradesh, challenging the
promotion of two of his juniors (third respondent herein and one V.P. Singh)
on the ground that the Bank had failed to make promotions on the basis of
seniority cum merit, prescribed under the Rules, and had made promotions H
122 SUPREME COURT REPORTS (2006) SUPP. 2 S.C.R.

A on the basis of merit cum seniority contrary to the rules. Appellant contended
that the procedure whereby only 20 marks were allocated to seniority and
80 marks were allocated for other factors for the purpose of assessment, and
promoting those who secured the highest marks on the basis of such
assessment of overall performance, clearly demonstrated that the promotions
were not on the basis of seniority cum merit.
B
6. The Bank resisted the said petition by contending that the promotions
were made on the basis of seniority cum merit and not on merit cum
seniority, in accordance with the Promotion Policy dated 2.2.1989. It
contended that the promotion policy took note of seniority also by earmarking

c 20 out of l 00 marks for seniority and therefore the procedure adopted by
the bank for promotions to the post of Field Supervisor should be considered
as seniority cum merit. It was not disputed that the comparative merit of the
candidates was assessed with reference to performance appraisal, interview,
posting at rural/difficult centres and that the persons securing highest marks
in the order of merit were recommended for consideration for promotion.
D
7. A learned Single Judge of the Madhya Pradesh High Court allowed
the Appellant's writ petition by order dated 13.10.1998 following the
decision of this Court in B. V. Sivaiah & Ors. v. K. Adda11ki Babu, [1998)
6 SCC 720. He held that the promotions had been made not on the basis of
seniority cum merit, but on the basis of merit-cum-seniority. Consequently,
E the promotion of third respondent herein and V.P. Singh were quashed with
a direction to the Bank to consider the case of appellant for promotion to
the post of Field Supervisor, along with other eligible candidates. The said

F
order of the learned Single Judge was challenged by the third respondent and
V. P. Singh in a Letters Patent Appeal which was dismissed on 2.12.1998.
It is stated that the special leave petition filed against the decision in the
-
Appeal was also dismissed.

8. As no action was taken in pursuance of the said decision, the
appellant filed a contempt petition on 31.1.1999. The said petition was
disposed of by the High Court, on 10.5.1999, recording the assurance of the
G Bank that the case of the appellant will be considered and appropriate orders
will be passed within one month. Thereafter the bank again passed an order
of promotion dated 14.6.1999 promoting the third respondent to the post of
Field Supervisor. Appellant was not promoted.

9. The appellant, therefore, once again approached the Madhya Pradesh
H
HARIGOVIND YADAY v. REWA SIDHI GRAMIN BANK [RAVEENDRAN, J.] 123

High Court in W.P. No.2800/1999 challenging his non-promotion, contending A
that the bank has not made promotion on the basis of seniority cum merit.
He contended that the Bank ha.d failed to follow the decision of this Court
in SIVA/AH and the decision in his own case. He contended that even under
the basis of merit-cum-seniority adopted by the Bank, he was entitled to
promotion on the total percentage of marks secured by him and he had been
deliberately failed in the interview to deny him promotion. The appellant B
stated that he had secured the following marks in the assessment made for
promotion :

Criteria Total Marks secured
marks by appellant
c
Seniority 20 16

Posting at rural centres JO 10

Posting at difficult centres 5 3
D
Performance 40 24

Interview 25 9

TOTAL 100 62
E
10. The bank resisted the second petition also. It contended that the
Departmental Promotion Committee had considered the case of the appellant
and other eligible candidates in terms of the promotion policy contained in
its circular dated 2.2.1989 by assessing appellant's performance and
interviewing him. The Bank contended that, as per the promotion policy, the F
candidates who secure less than 40% of the 25 marks allocated for interview
will not be considered for promotion; that only those who got 10 marks and
above in the interview, were eligible for promotion; and that appellant who
had secured only 9 marks in interview was thus not eligible for promotion.
G
11. A learned Single Judge of the MP High Court dismissed the
appellant's writ petition (WP No. 2800/1999) by order dated 26.4.2000. He
held that in Sivaiah's case (supra), this Court had accepted the fixation of
minimum standard for assessing merit and a candidate who fails to fulfil the
said minimum standard cannot be promoted. The learned Single Judge held
that the appellant was not promoted, as he failed to secure the prescribed H
124 SUPREME COURT REPORTS [2006] SUPP. 2 S.C.R.

A minimum for interview. The learned Single Judge was of the view that the
method evolved for adjudging the minimum merit was in consonance with
the principle of seniority-cum-merit, and the appellant having failed in
interview for promotion. he was not entitled to any relief.

12. The appellant challenged the said order before the Division Bench
B which rejected the LPA by judgment dated 23.8.2001 affinning the decision
of the learned Single Judge. It held that the criteria adopted by the employer
by prescribing minimum qualifying marks for interview for determining the
suitability of the candidate for promotion was just and reasonable and the
appellant having failed to secure the minimum marks in the interview, was
C rightly not promoted. Both the single Judge and the Division Bench
purported to follow the principle laid down in para 37 of the Judgment in
SIVA/AH (supra). The said decision of the Division Bench of the High Court
is challenged in this appeal by special leave.

13. As both parties have relied on the decision in Sivaiah (supra), we
D
may start by referring to the relevant observations therein. The decision in
SIVA/AH was a common judgment which considered the meaning of the
criterion 'seniority-cum-merit' for promotion. The decision dealt with
several distinct batches of cases relating to different Regional Rural Banks,
which had different promotion policies, that is Rayalaseema Grameena Bank,
E Pinakini Grameena Bank, Bastar Kshetriya Gramin Bank, Rewa Sidhi
Gramin Bank (respondent herein) and Chhindwara-Seoni Kshetriya Gramin
Bank.

The High Courts had taken the view that if "seniority-cum-merit" criterion
F is adopted for the purpose of promotion, then first the senionnost eligible
employee has to be tested to find out whether he possesses the minimum
required merit for holding the higher post and only if he is not found suitable
or fit, his immediate junior may be tested for the purpose of promotion. The
said view was assailed before this Court by the various regional rural banks
as well as the promoted officers whose promotions had been set aside by
G the impugned judgments of t_he High Court.

This Court noted that in the matter of formulation of a policy for promotion
tu a higher post. the two competing principles which may be taken into
account are inter-se seniority and comparative merit of employees who are
H
HARIGOVIND YADAV v. REWA SIDHI GRAMIN BANK [RAVEENDRAN, J.] 125

eligible for promotion. This Court observed : A

"Jn Sant Ram Sharma v. Staie ofRajasthan, AIR (1967) SC 1910,
this Court has pointed out that the principle of seniority ensures
absolute objectivity by requiring all promotions to be made entirely
on grounds of seniority and that if a post falls vacant, it is filled
by the person who had served longest in the post immediately B
below. But the seniority system is so objective that it fails to take
any account of personal merit. It is fair to every official except the
best ones. An official has nothing to win or lose provided he does
not actually become so inefficient that disciplinary action has to be
taken against him. The criterion of merit, on the other hand, lays c
stress on meritorious performance irrespective of seniority and
even a person, though junior but much more meritorious than his
seniors, is selected for promotion. The Court has expressed the view
that there should be a correct balance between seniority and merit
in a proper promotion policy. The criteria of"seniority-cum-merit"
and "merit-cum-seniority" which take into account seniority as well D
as merit seek to achieve such a balance."

This Court also noted that while the principle 'seniority-cum-merit' lays
greater emphasis on seniority, 'merit-cum-seniority' laid greater emphasis on
merit and ability and seniority plays a less significant role, becoming relevant E
only when merit is approximately equal. After referring to several decisions
bearing on the issue, this Court enunciated the following general principle
in regard to promotions by seniority cum merit (at para 18) which is relied
on by the Appellant :

"We thus arrive at the conclusion that the criterion of "seniority- F
cum-merit" in the matter of promotion postulates that given the
minimum necessary merit requisite for efficiency of administration,
the senior, even though Jess meritorious, shall have priority and a
comparative assessment of merit is not required to be made. For
assessing the minimum necessary merit, the competent authority G
can Jay down the minimum standard that is required and also
prescribe the mode of assessment of merit of the employee who is
eligible for consideration for promotion. Such assessment can be
made by assigning marks on the basis of appraisal of performance
on the basis of service record and interview and prescribing the
H
126 SUPREME COURT REPORTS [2006) SUPP. 2 S.C.R.

A minimum marks which would entitle a person to be promoted on
the basis of seniority-cum-merit."

Thereafter, this Court took up the cases of each Bank separately. While
dealing with the case relating to Chhindwara-Seoni Kshetriya Gramin Bank,
this Court observed thus (in para 37) which is relied on by the Respondents:
B
"During the course of hearing of the appeal, the learned counsel for
the respondent-Bank has placed before us the relevant documents
relating to the impugned selection and promotion. On a perusal of
the said documents, we find that 50 marks out of the total of 100
c marks were prescribed as the minimum qualifying marks for
interview and only those who had obtained the qualifying marks in
interview were selected for promotion on the basis of seniority. It
was, therefore, a case where a minimum standard was prescribed
for assessing the merit of the candidates and those who fulfilled the
said minimum standard were selected for promotion on the basis of
D seniority. In the circumstances, it cannot be said that the selection
has not been made in accordance with the principle of "seniority-
cum-merit". We are, therefore, unable to uphold the impugned
judgment of the High Court. The appeal has to be allowed and the
impugned judgment of the High Court dated 7.2.1997 passed by the
learned Single Judge of the High Court has to be set aside and the
E
promotion of the appellant on the post of Ar1:a/Senior Manager
under order dated 8.4.1993 has to be affirmed."

14. Before considering the effect of observations in para 37 of the
decision in SIV AIAH, relating to Chindwara-Seoni Kshetriya Gramin Bank,
F let us refer to what this Court held with reference to other Banks :

(i) Rayalaseema Grameena Bank had adopted a system of assessment
where weightage to be given (total of 120 marks) was divided into
seniority (34 marks), qualification (I 0 marks), interview (20 marks)
and performance (56 marks). Only those officers who had secured
G the higher number of marks were ultimately promoted. On these
facts, this Court held :

"It is not a case where minimum qualifying marks are prescribed
for assessment of performance and merit and those who secure the
prescribed minimum qualifying marks are selected for promotion
H
HARIGOVIND YADAV v. REWA SIDHI GRAMIN BANK [RAVEENDRAN, J.] 127

on the basis of seniority. In the circumstances, it must be held that A
the High Court has rightly come to the conclusion that the mode
of selection that was in fact employed was contrary to the principle
of "seniority-cum-merit" laid down in the Rules."

(ii) Pinakini Grameena Bank had adopted a system of assessment where
weightage to be given (total of 100 marks) was divided into B
seniority (55 marks), passing CAIIB (5 marks) performance (25
marks) and interview (15 marks). Only those who secured highest
number of marks were promoted. This Court held :

"The said circular did not prescribed minimum qualifying marks for
assessment of performance and merit on the basis of which an
c
officer would be considered for being selected and, as pointed out
by the High Court, the selection was made of only those officers
who secured the highest number of marks amongst the eligible
officers. In the circumstances, the High Court, in our view, has
rightly held that this method of selection was contrary to the D
principle of "seniority-cum-merit" and it virtually amounts to the
application of the principle of "merit-cum-seniority".

(iii) Bastar Kshetriya Gramin Bank made selections on the basis of
interview ofall the eligible officers by the Staff Selection Committee
and a select list of five persons was prepared and on that basis E
promotions were made. This Court held :

"It is not disputed that the selection was made on the basis of marks
assigned on the basis of interview by the Selection Committee and
those who secured the highest marks were selected. The selection
F
process adopted for the purpose of promotion to the post of Area
Managers/Senior Managers was thus not in consonance with the
principle of "seniority-cum-merit" and the promotions were not
made in accordance with the Rules."

15. Thereafter, this Court considered the case of the first Respondent G
Bank itself (in paras 33 to 35). There also the bank relied on the very same
promotion policy contained in circular dated 2.2.1989 (with which we are
concerned) for promotion to the post of Area/Senior Manager by seniority
cum merit. The promotion policy provided that the promotion from the post
of officer to Area/Senior Manager shall be on the basis of his overall
H
128 SUPREME COURT REPORTS [2006] SUPP. 2 S.C.R.

A performance based on appraisal reports and his potentiality shall be assessed
in the interview, duly supplemented by weightage for job responsibility,
placement, posting mobility etc. I00% weightage was divided into seniority
(15 marks). job responsibility (12 marks), placement'posting mobility (8
marks), performance (40 marks) and interview (25 marks). As in the case
of promotion to the post of Field Supervisors, the policy provided that the
B candidates who secure less than 40% of the marks allocated for interview,
shall not be considered for promotion and the Iist of successful candidates
in the order of total marks obtained will be placed b)' the Staff Selection
Committee for consideration for promotion. The challenge to the promotion
of Area/Senior Managers on the above basis was upheld by the learned
c Single Judge and confirmed m Appeal by the Division Bench. This Court
dismissed the appeals on the following reasoning :

"For the same reasons, civil appeals arising out of Special Leave
Petition [C} Nos.19965-19966 of 1997 are also liable to be
dismissed inasmuch as according to the promotion policy dated
D 2 2.1989, selection was made on the basis of the total number of
marks obtained b)' the eligible candidr.tes. The criterion of the
promotion policy cannot be regarded as being in consonance with
the principle of "seniority-cum-merit" as prescribed under the
Rules."
E 16. It is thus clear that this Court did not accept the promotion policy
contained in circular dated 2.2.1989 as being in consonance with the
principle of seniorit:r-cum-merit. This Court held that the policy which did
not prescribe a minimum standard for assessing merit and which promoted
candidates on the ba>is of comparative merit, with reference to total marks
F obtained by the eligible candidates, followed the merit-cum-seniority principle.
The decision in SIV4/AH relating to Area/Senior Managers of the first
respondent bank was followed by the High Court in the case of appellant,
in its judgment dated 13. I0.1998 and it was held that the procedure adopted
by the first respondent bank for promotion of third Respondent and V.P.
Singh as per circular dated 2.2.1989 was contrary to the Rules which required
G promotions by seniority-cum-merit, and the bank was directed to redo the
promotions by considering the case of appellant and other eligible candidates
by adopting the criteria of seniority cum merit. That decision attained final it)'
as the appeal and SLP were rejected. It may be stated that even prior to the .....
decbiun in SIVAJAH relating to Area/Senior Managers of the first respondent
H
HARIGOVIND YADAV v. REWA SIDHI GRAMIN BANK [RA VEENDRAN, J.] 129

,._
bank, the same view had been expressed in the earlier judgment dated A
9.10.1996 of the Division Bench of the Madhya Pradesh High Court in LPA
No.151/1996 and connected cases and civil appeals arising out of SLP (c)
Nos.17780-8111997 filed against the said judgment dated 9.10.1996 had
been dismissed. Therefore we have several rounds of litigation which had
., been fought up to this court where the High Court and this court have
repeatedly and clearly held that the procedure prescribed, in the promotion
B
policy circular dated 2.2.1989, is not in consonance with the principle of
seniority-cum-merit prescribed for promotion under the Rules but amounted
to following the principle of merit cum seniority and therefore vitiated. What

- is surprising is that, in spite of these decisio.ns, the first respondent bank again
adopted the very same procedure contained in the promotion policy of
2.2.1989 and again failed to promote the appellant by assigning him marks
of 16 (20), 10 (IO), 3(5), 24 (40) and 9 (25) and held that he was not eligible
c

for promotion as he did not secure the minimum marks of 10 prescribed for
interview. But, admittedly, there was no overall minimum and the procedure
required assessment of comparative merit. This is not therefore a case of the
D
appellant failing to secure the minimum necessary merit required for
promotion but a case where the appellant's entitlement to promotion was
sought to be assessed by adopting a procedure which allotted 20 marks for
seniority, 40 marks for performance, 15 marks for posting at rural and
difficult centres and 25 marks for interview. The bank has persisted in
adopting the merit-cum-seniority procedure in spite of the decisions of this E
Court in several rounds of litigation referred to above. As the entire
promotion procedure adopted by the bank as per its policy dated 2.2.1989
has stood rejected by the High Court and this court in SIVA/AH (supra) as
also in the earlier round of litigation of Appellant, the promotion of third
Respondent and. non-promotion of appellant by adopting the very same F
procedure is liable to be interfered with. -

. 17. Interviews can be held and assessment of performance can be made
by the Bank in connection with promotions. But that can be only to assess
the minimum necessary merit. But where the procedure adopted, does not
provide the minimum standard for promotion, but only the minimum G
standard for interview and does the selection with reference to comparative
marks, it is contrary to the Rule of 'seniority-cum-merit'. This aspect of the
matter has been completely lost sight of by the learned Single Judge and the
Division Bench of the High Court in this rourid of litigation. As noticed
above, they have proceeded on the basis that the appellant having failed to H
130 SUPREME COURT REPORTS [2006] SUPP 2 S.C.R.

A secure the minimum marks prescribed for interview, was rightly denied
promotion, by ignoring the principle laid down by this court in SIVA/AH in
regard to seniority-cum-merit. At all events, as the promotion policy adopted
hy the Bank was held to be illegal in the earlier round of litigation (W.P.
No. 4485/1993 dated 13. I 0.1988), the Bank could not have adopted the same
policy to again reject the Appellant for promotion. We may also note that
B the law laid down in SIVA/AH was reiterated in Sher Singh v. Surinder
Kumar [ 1998] 9 SCC 652 wherein this Court had occasion to consider a
similar question relating to the promotion for the post of clerk to Field
Supervisor in the case of another Gramin Bank. This Court held that as the
criterion for making promotion from the post of clerk to that of Field
C Supervisor was seniority-cum-merit but the Bank did not follow the criterion ...
of seniority-cum-merit but made promotions on the basis of merit-cum-
seniority, the promotion was vitiated and therefore invalid.

18. We will now deal with para 37 in SWUAH (supra) relied on by
the Respondents. Para 37 related to Chhindwara-Seoni Kshetriya Gramin
D Bank where the procedure adopted for promotion was different from the
criteria that was adopted by the Rewa Sidhi Gramin Bank, first respondent
herein. In the case of Chhindwara Seoni Kshetriya Bank, the assessment of
minimum necessary merit WB~ by interview. The candidate who secured a
minimum of50 out of 100 marks in the interview. was selected for promotion
E on the basis of seniority. It was thus found to be a case where minimum
standard was prescribed for assessing the merit of the candidates and those
who qualified by securing the minimum marks (50%) were promoted strictly
as per seniority. Thus, it was in consonance with the principle of seniority-
cum-merit. Therefore, the observations in para 37 of SIVA/AH are of no
assistance to Respondents. As we have already noticed, in this case, the
F
procedure is not one of ascertaining the minimum necessary merit and then
promoting the candidates with the minimum merit in accordance with
seniority, but assessing the comparative merit by drawing up a merit list, the
assessment being with reference to marks secured for seniority, performance,
postings at rural/difficult places and interview. The fact that the appellant
G had failed to secure the minimum marks in interview, is not relevant as the
entire procedure adopted by the bank (of which interview is a part) is found
to be vitiated and not in consonance with the principle of seniority cum merit.

19. In this view of the matter. we do not propose to go into the
H contention of the appellant that though he had secured very high percentages
HARIGOV!ND YADAV v. REWA SIDHI GRAMIN BANK [RA VEENDRAN, J.] 131

(overall 62%), with the intention of deliberately denying him promotion, he A
had been failed in interview by giving him 9 marks as against the minimum
of 10 for interview.

20. The learned counsel for the Bank placed reliance on the decision
of this Court in K. Samantaray v. National Insurance Co. ltd., [2004] 9 SCC
286, where this Court following the earlier decision in Syndicate Bank SC B
& ST Employees Assn. v. Union of India, [1990] Supp. SCC 350, reiterated
that apart from the recognized methods of seniority-cum-merit and merit-
cum-seniority, there can also be a third method, that is a hybrid mode of
promotion. This Court observed :

"While laying down the promotion policy or rule, it is always open
c
to the employer to specify the area and parameter of weightage to
be given in respect of merit and seniority separately so Jong as
policy is not colourable exercise of power, nor has the effect of
violating any statutory scope of interference and other relatable
matters." D
But in that case promotions were not governed by any statutory Rules, but
by a promotion policy. The above observations made with reference to such
a policy, which wholly occupied the field insofar as promotion is concerned,
are not relevant where the statutory Rules require promotion by seniority-
cum-merit. E

21. The next question that arises for consideration is the relief to b~
granted. The appellant was first considered for promotion during 1991 and
was not promoted, by wrongly adopting the principle of merit-cum-seniority.
The said procedure was found to be erroneous by the Single Judge, Division F

-
Bench and by this court. The Bank was directed to consider the case of
Appellant for promotion on the basis of seniority-cum-merit. Thereafter, in
the contempt proceedings initiated by the appellant, the Bank undertook to
comply with the order directing consideration of the appellant's case by the
procedure of seniority cum merit. But the Bank, again by adopting the merit-
cum-seniority method, failed to promote the appellant and promoted third
G
respondent. The procedure adopted by the Bank had been found to be faulty
on three occasions by this Court and the High Court, one of which was in
the case of Appellant himself. The appellant had been denied promotion for
more than 16 years by repeatedly adopting such an erroneous procedure. In
the circumstances, we do not think it necessary to drive the appellant once H
132 SUPREME COURT REPORTS (2006) SUPP. 2 S.C.R.

A again to face the process of selection for promotion. This Court in Comptroller
and Auditor General of India v. K.S. Jagannathan, (1986] 2 SCC 679
observed thus :

"There is thus no doubt that the High Courts in India exercising their
jurisdiction under Article 226 have the power to issue a writ of
B mandamus or a writ in the nature of mandamus or to pass orders
and given necessary directions where the government or a public
authority has failed to exercise or has wrongly exercised the
discretion conferred upon it by a statute or a rule or a policy decision
of the government or has exercised such discretion mala fide or on
c irrelevant considerations or by ignoring the relevant considerations
and materials or in such a manner as to frustrate the object of
conferring such discretion or the policy for implementing which
such discretion has been conferred. In all such cases and in any
other fit and proper case a High Court can, in the exercise of its
jurisdiction under Article 226, issue a writ of mandamus or a writ
D in the nature of mandamus or pass orders and given directions to
compel the performance in a proper and lawful manner of the
discretion conferred upon the government or a public authority, and
in a proper case, in order to prevent injustice resulting to the
concerned parties, the court may itself pass an order or give
E directions which the government or the public authority should have
passed or given had it properly and lawfully exercised its discretion.'"

Having regard to the factual background of the case, and having regard to
the fact that even under the merit cum seniority basis adopted by the bank
the appellant had secured high marks and he was denied promotion on the
F ground that he failed to secure minimum marks in the interview, there is no
need to refer the matter for fresh consideration. With a view to do complete
justice, in exercise of our power under Article 142 we hereby direct the first
respondent bank to promote the appellant as a Field Supervisor, from the date
the third defendant was promoted as Field Supervisor and place him above
G the third Respondent. However, he will be entitled to monetary benefits
flowing from such promotion only prospectively, though the pay is to be
refixed with reference to the retrospective date of promotion.

22. This app~al is allowed accordingly.

H V.S.S. Appeal allowed.