Holding

The promotion policy must be given a purposive construction, allowing vacancies arising during the panel's validity to be filled from the waiting list, and the insurer acted mala fide in denying the promotion.

Summary

The respondent, an Inspector Grade I, was placed on a waiting list for promotion to Assistant Administrative Officer (Development) after a panel of eight names was prepared. During the panel's validity, two new posts were created, and the respondent claimed promotion, but the insurer filled the vacancies by transferring Veterinary officers and denied his claim. The respondent obtained a writ of mandamus directing notional promotion and seniority, which the High Court upheld, granting monetary benefits from the petition date. On appeal, the insurer argued that the promotion policy barred filling vacancies from the earlier panel, relying on procedural provisions. The Supreme Court held that the promotion policy must be given a purposive construction, allowing vacancies arising during the panel's validity to be filled from the waiting list, and found the insurer's actions mala fide. Consequently, the Court affirmed the High Court's decision and dismissed the appeals. No costs were awarded.

Issues considered

Whether vacancies created during the validity of a promotion panel can be filled from the waiting list prepared under the promotion policy.
Whether the insurer acted mala fide by denying the respondent's promotion and filling the vacancies by transfer.
Whether the High Court's direction for notional promotion, seniority, and monetary benefits is legally justified.
How the promotion policy provisions (especially paragraphs 2, 13, and 14) should be interpreted.

Legislation cited

Constitution of Indias. Article 226

Subjects

promotionwaiting listservice lawadministrative lawmala fidesenioritynotional promotionpromotion policypromotion committeevacancytransfer

Judgment

A ORIENTAL INSURANCE CO. LTD.
v.
T.S. SASTRY

OCTOBER 30, 2003

B [V.N. KHARE, CJ. AND S.B. SINHA, JJ.]

Service Law :

Promotion-Person put on waiting list-Claim for promotion-Oriental
C Insurance Compat1y-!nspector Grade /-Eligibility for promotion to
Administrative Officer (Development)-Promotion Committee considering merit
of the officer and putting him on waiting list-Within the validity period of the
waiting list, new vacancies arose and the officer put forward his claim-
/nsurance Company's stand that the new vacancies were to be filled up only
D from panel prepared by subsequent Promotion Committee and not from amongst
candidates on panel of earlier Promotion Committee-High Court directing
Insurance Company to give notional promotion and seniority with effect from
the date vacancies occurred and monetary benefit from the date offiling writ
petition-Held, for the purpose of filling up the posts by way of promotion
what was necessary to be considered, was the total number ofposts available
E at the time of making of and during the currency of panel-The Promotion
Policy has nothing to do with the places where the vacancies arise -In terms
of the promotion policy the list prepared would not only include the number •.

of candidates equal to the number of vacancies but also a number equal to
20% ofdeclared vacancies-Such a contingent list is preparedfor the purpose
F ofgiving promotions on a vacant post as and when required prior to formation
of the next Promotion Committee-The very fact that there exists a provision
for preparation of waiting list, the employees who were found eligible to be
promoted may be promoted on creation of any new post or by any vacancy
occurring in the manner provided for in the relevant clause of the Promotion
Policy-Promotion Policy must be given a purposive construction-It must be
G construed in such a fashion so that each and every provision contained therein
must be given effect to-Insurance Company acted mala fide in depriving the
officer his legitimate claim for promotion.
... .
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3756-3757 of
1998.
II 34
ORIENTAL INSURANCE CO. LTD. v. T.S. SASTRY 35
From the Judgment and Order dated 3.4.97 of the Andhra Pradesh High A
Court in W.A.M.P. No. 298/98 in W.A. No. 527 of 1991.

Najmi Waziri and Irshad Ahmad for the Appellant.

Dr. Rajeev Dhavan, R. Santhana Krishnan, G.Sateesh and D. Mahesh
Babu for the Respondent. B
The following Order of the Court was delivered :

The respondent herein was appointed as Trainee Inspector with the
appellant-Insurance Co. on 14.3.1977 w.e.f. 1.1.1978. He was categorised as
Grade I Inspector. In the year 1983, 8 posts of Assistant Administrative C
officer (Development) fell vacant. It is not disputed that the said vacancies
were required to be filled up on the basis of merit-cum-seniority. It is also
not disputed that the respondent herein was also eligible for being considered
for promotion to the said post. The Committee constituted for making
promotion after considering the merit of the candidates, prepared a panel of D
8 names for the purpose of promotion to the post of Assistant Administrative
Officer (Development). However, the respondent herein was put on the waiting
list at sl. No. 9 thereof.

In November 1984, one more post of Assistant Administrative officer
(Development) was created and subsequently on 22.5.1985 a second post E
was further created. It is not disputed that the panel prepared by the Promotion
) Committee was valid from 5th July 1984 to 4th July 1985. Having regard to
the availability of two more posts, the respondent herein made a representation
to the competent authority for promoting him on one of these said posts.
However, the respondent, having not received any reply, filed a petition
under Article 226 of the Constitution before the High Court of Judicature of F
Andhra Pradesh at Hyderabad for issuance of a writ in the nature of mandamus
directing the Insurance company to promote him to the post of assistant
Administrative officer (Development). A learned Single Judge of the High
Court dismissed the writ petition. However on a writ appeal being filed by
the respondent herein, the judgment and order of the Single Judge was set G
aside and the appeal was allowed by issuing a direction to give notional
promotion and seniority to the respondent with effect from the date when the
Branches at Srikakulam and Kumool were opened in 1984. However, the
respondent herein was held to be entitled to monetary benefit only from the
date of filing of the writ petition. The appellant herein filed a review petition
-. before the High Court which was dismissed. Aggrieved, the appellant is in H
36 SUPREME COURT REPORTS (2003) SUPP. 5 S.C.R.
...
A appeal before us by means of special leave petitions.
Learned counsel appearing for the appellant urged that in view of the
Promotion Policy framed by the appellant-Insurance Co., the said vacancies
could not have been directed to be filled up by a person on the waiting list
of panel prepared in the year 1984. Learned counsel referred to the Promotion
B Policy for promotion of Inspector Grade I to the cadre of Assistant
Administrative Officer, para 2 whereof runs as under:

"The vacancies to be filled during the ensuing years shall be
determined after taking into account the new posts created, the
promotions to the higher cadres as also the retirement vacancies plus
c the exists on account of deaths, resignations and terminations. The
vacancies so determined shall be declared by the promoting authorities
by the Ist of December of the year preceding the year for which
promotions are to be made."

On the strength of para 2 above, it was argued that the said two vacancies
D could have been filled up only from the panel prepared by the subsequent
•
Promotion Committee and not from amongst the candidate on the panel of
the earlier Promotion Committee.

Dr. Rajeev Dhavan, learned senior counsel appearing on behalf of the
E respondent, however, submitted that waiting list procedure in the matter of
grant of promotion is a well-known procedure and as the appellant herein
failed and neglected to give effect thereto, the Division Bench of the High
Court must be held to be correct in passing the impugned judgment. Our
attention has in this connection been drawn to the Promotion Policy for
promotion of the Inspector in the cadre of Assistant Administrative Officer,
F the relevant portions whereof are as under:

"13. Ranking list: The Promotion Committee shall finalise the
recommendations on the basis of the marks gained on all the criteria
and arrange the list in the descending order of the marks gained. The
Ranking List will be valid for period of one year from the date of its
G publication, which may, in an exceptional case be extended by the
three months at the discretion of Chainnan-cum Managing Director.

14. The list so prepared shall include the number of candidates equal
'"'
to the number of vacancies declared for the purpose of promotion
plus a number equal to 20% of the declared vacancies to be kept as
H )
ORIENTAL INSURANCE CO. LTD. v. T.S. SASTRY 37
Contingent List from which the promotions can be made as and when A
required before the formation of the next promotion Committee."

It is no doubt true, as has been submitted by the learned counsel
appearing on behalf of the appellant that eligibility criteria was required to
be completed with in relation to the vacancies occurring in a particular year
was to be determined upon taking into account new posts created, the B
promotion to the higher cadres as also the retirement vacancies plus vacancies
·which might occur on account of deaths, resignations and terminations.
Paragraph 2 of the Promotion Policy as referred to hereinbefore is a procedural
provision for the purpose of calculation of the number of vacancies which are
to be declared, but the same is not exhaustive as it does not lay down that C
no vacancy occurring owing to creations of new posts cannot be filled up
from panel during which it remains valid. The Promotion Policy must be
given a purposive construction. The Promotion Policy must be construed in
such a fashion so that each and every provision contained therein must be
given effect to. This Court on a number of occasions has emphasised the
need of grant of promotion. If such a construction is put, as has been suggested D
by the learned counsel appearing on behalf of the appellant, paragraphs 13
and 14 of the said policy decision would become otios~.

The very fact that there exists a provisions for preparation of waiting
list, we have no doubt in our mind that the employees who were found
eligible to be promoted to the post of the Assistant Administrative Officer E
may be promoted on creation of any new post or by any vacancy occurring
in the manner provided for in Clause 2.

In terms of Clause 14 of the Promotion Policy, the list prepared would
not only include the number of the candidates equal to the number of vacancies F
but also a number equal to 200/o of the declared vacancies. Such a contingent
list is prepared for the purpose of giving promotions in a vacant post as and
when required prior to formation of the next Promotion Committee. The
appellant accepts that the respondent herein was eligible for promotion in the
year 1984. It also stands accepted that two branch offices were opened at
Kurnool and Srikakulam. G
Learned counsel appearfog on behalf of the appellant made a submission
to the effect that as the said post~ were filled up by transferring two officers
who were from the Veterinary Department, the other two posts from which
said officers were transferred, did not fall vacant. The said submission must
be rejected. For the purpose of filling up the posts by way of promotion what H
38 SUPREME COURT REPORTS (2003] SUPP. 5 S.C.R.

A was necessary to be considered, was the total number of posts available at the
..
time of making of and during the currency of the panel. The Promotion
Policy has nothing to do with the places where the vacancies arise. The posts
of Assistant Administrative Officer at Kumool and Srikakulam were required
to be filled up. If the said posts were filled up by way of transfer, evidently
B the other two posts which were available should have been filled up by way
of promotion in terms of Clauses 13 and 14 of the a Promotion Policy.
..
Furthermore, the vacancies at Kumool and Srikakulam although were
to be filled up from the panel by •the subsequent Promotion Committee
according to the appellant, were actually filled up by the transfer of existing
C cadre. The contention raised by the appellant was that such posts were required
to be filled up by the Assistant Development Officer, Veterinary, had been
found to the incorrect. The High Court, having regard to the conduct of the
appellant herein had, arrived at a finding of fact that filling up of the said
post of Assistant Administrative Officer, while two branches in Kumool and
Srikakulam were opened, by transferring two Veterinary officers working
D elsewhere, was an act of malafide on the part of the appellant. The High
Court further held that the appellant had failed to establish that the two
branches which were opened during the currency of the list prepared b:r the
Selection Committee were to be managed only by the Veterinary Officer and
thus the grievance of the respondent herein that the said vacancies were to
E be filled up only to deprive him of the right of promotion as he was No. I in
the contingent reserve, was correct.

We are, therefore, in agreement with the view of the High Court holding
that the appellant-Insurance Co. acted malafide in depriving the respondent
herein his legitimate claim for promotion.
F
In that view of the matter, we are not inclined to interfere in the matter.
The appeals are dismissed.

No costs.

G R.P. Appeals dismissed.

-