Supreme Court of India

RANI LAXMIBAI KSHETRIYA GRAMIN BANKversusCHAND BEHARI KAPOOR AND ORS. ETC.

Citation: 1998 INSC 356
Decided: 9 September 1998
Disposal: Appeal(s) allowed
Bench: SUJATA V MANOHAR

Holding

The Supreme Court held that the panel of successful candidates is valid only for the period prescribed by the Government (normally one year, extendable only with proper approval), that inclusion in the list does not create an indefeasible right to appointment, and therefore the High Court’s mandamus directing appointments was erroneous and was set aside.

Summary

The Rani Laxmibai Kshetriya Gramin Bank advertised 35 Probationary Officer and 35 Field Supervisor posts in 1983, selected candidates including the respondents, but later appointed fewer officers despite increasing the advertised vacancies. The panel of successful candidates was to remain valid for one year under Government guidelines, though the Bank’s Board and a later agreement extended it temporarily, after which it expired. The respondents filed writ petitions under Article 226 seeking a mandamus directing their appointment; the Allahabad High Court ordered the Bank to appoint them. The Bank appealed to the Supreme Court, which examined whether vacancies actually existed, whether inclusion in the selection list conferred an enforceable right, and the permissible duration of a panel’s validity. The Court found no material proving vacancies, reiterated that a list does not create an indefeasible right to appointment, and held that the panel’s life is ordinarily one year unless properly extended per the Ministry of Finance guidelines. Consequently, the High Court’s mandamus was set aside and the writ petitions dismissed.

Issues considered

Whether the High Court was justified in concluding that vacancies existed in the post of Field Supervisor.
Whether inclusion of a name in the list of selected candidates confers a right to appointment enforceable by mandamus.
What is the period for which a list of successful candidates remains alive and can a court direct appointments after its expiry.
Whether the agreement dated 16 October 1985 stipulated that the list would remain alive until all candidates were appointed.

Legislation cited

Regional Rural Banks Act, 1976s. 24

Subjects

recruitmentpanel lifeRegional Rural BankmandamusArticle 226vacancyselection listgovernment guidelines

Judgment

A RANI LAXMIBAI KSHETRIYA GRAMIN BANK
v.
CHAND BEHARI KAPOOR AND ORS. ETC.

SEPTEMBER 9, 1998

B (SU.TATA V. MANOHAR AND G.B. PATTANAIK, JJ.]

Se1vice Law: Rec111itment-Life span of panel and select list to be kept
alive only for a peliod of one yew:

C Constitution of India, 1950 : A11icle 226-Scope of illlerferencl~High
Cowt should not give directions for appointmelll after the expi1y of the life of
panel.

Regional Rural Bank Act, 1976-Section 24-Enjoins the mral banks
to be guided by such directions as the Central Govemment may after consult-
D ation with the Rese1ve Bank of India gives in regard to matter of policy
involving public interest-Guidelines issued by the Central Govemment in- ..
dicating the peliods for which the life of a panel for recmitment would be kept
alive-Binding 011 the Banks.

E The Appellant Bank issued advertisement and invited applications
for 35 posts of Probationary Officer (Branch Manager) and 35 posts of
(Field Supervisor) on 18.7.1983. The Respondents applied for the post of
Field Supervisor/Probationary Officer and appeared at the written test
conducted by the Appellant for selection. On being declared successful in
the written test they were also called for interview and finally were included
F in the list of selected candidates. Subsequent to the said advertisement the
Appellant decided to increase the number of posts of Field Supervisor
from 35 to 55 but only 26 Field Supervisors and 36 Probationary Officers
were appointed and Respondents were left out notwithstanding their in-
...
clusion in the lists of successful candidates. The life of the panel was to
G remain operative for one year but it was extended for six months by the
Board of the Appellant-Bank which was further extended for six months
after an agreement was reached between the officers of the Bank and
members of the Union and yet the respondents were not appointed.

Respondents approached the High Court under Article 226 of the
H Constitution of India for issuing writ of mandamus directing the Bank to
524
R.L. KSHETRIYA G. BANK v. C.B. KAPOOR 525
appoint them. The High Court allowed the writ petition. against which the A
Appellant-Bank, approached this Court under Article 136 of the Constitu-
tion of India.

Appellant contended before this Court that the life of the panel
expired on 2.5.1985. By virtue of the decision of the Board the life of the
panel was extended for six months and again by virtue of agreement be- B
tween the parties it stood further extended by six months and thus the panel
expired on 30.4.1986. In this view of the matter, it was further contended by
the Appellant, that no direction could have been given by the High Court
to issue appointment letters to the Respondents, and that mere inclusion
in the lists of successful candidates does not confer an indefeasible right to
be appointed.
c
Allowing the ap11eals, this Court

HELD : 1.1. From the materials produced by the Respondents, no
conclusion could be arrived at that there exist vacancies in the Bank. The D
High Court entered into the arena of calculation basing upon the principle
that there should be appointment of one ·Field Officer for 500 accounts.
This process of calculation is wholly erroneous and is not permissible for
a Court in exercise of its jurisdiction under Article 226 of the Constitution.
[530-F; G; H; 531-A]
1.2. Inclusion of name in the lists of successful candidates does not E
confer an indefeasible right to be appointed. [532-B]

Shankarshan Dash v. Union of India, [1991] 3 SCC 47, followed.

13. Normally the panel of select list should be kept alive only for a
period of one year in the light of letter dated 30.9.1980 issued by Ministry F
of Finance, Department of Economic Affairs (Banking Division) and if any
deviation from the said guidelines becomes necessary in the interest of
Bank, then it should be undertaken with the prior permission of the Board
of Directors and under intimation to the Government in the Banking
Division. [532-G; HJ
G
1.4. The terms of the Agreement dated 16.10.1985 was to the effect that
list of successful candidates for the appointment of Field Supervisor and
Probationary Officer declared on 2.5.1984 will be valid for a further period
of six months after 31.10.1985 and that the Management of the Bank will
appoint as far as possible the remaining selected candidates. These being H
526 SUPREME COURT REPORTS [1998) SUPP. 1 S.C.R.

A the terms of the agreement the conclusion is inescapable that such agree-
ment did not confer a right on the Respondents to be appointed to the post
of Field Supervisor/Probationary Officer and the Court is not justified to
make it en(orceable by issuing a writ of mandamus. [534-A; BJ

B
1.5. Under Section 24 of the Regional Rural Banks, Act 1976, a Rural
Bank in the discharge of its function, is reCJuired to be guided by such
--
direction as the Central Government may after consultations with the
Reserve Bank give in regard to matters of policy involving public interest.
In view of the aforesaid provisions of the Act, the directions/guidelines
issued by the Central Government indicating the periods for which the life
of a panel would be kept alive has a binding effect on the Bank. [533-B; CJ
c
2. The petitioner who approaches the court invoking the extra ordi-
nary jurisdiction of the court under Article 226 must fully aver and estab-
lish his rights flowing from the bundle of facts thereby reC)uiring the
respondents to indicate its stand either by denial or by positive assertions.
D But in the absence of any averments in the writ petition or even in the
rejoinder affidavit it is not permissible for a court to arrive at a conclusion
on a factual position merely on the basis of submission made in the course
of hearing. [531-F-GJ

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2650-
E 2655 of 1993.
From the Judgment and Order dated 22.12.92 of the Allahabad High
Court in C.M.W. No. 18342/88, 7628, 7627/89, 8690-91 and 8692 of 1991.

WITH
F Civil Appeal No. 2649 of 1993.

Dhruv Mehta, S.K. Mehta, Ms. Shobha, Fazlin Anam for Appellant.

Rakesh Dwivedi, Debasis Misra, (Ms. S. Janani) (NP), (Pramod
Swamp), (NP) and P.N. Puri for the Respondents.
G
The Judgment of the Court was delivered by

PATIANAIK, J. The judgment and order dated 22nd December,
1992 of the Division Bench of Allahabad High Court is the subject matter
of challenge in these appeals. By the said judgment the High Court
H directed the appellant - bank to appoint the respondents against the
R.L. KSHETRIYAG. BANK v. C.B. KAPOOR [PATIANAIK, J. J 527

vacancies of Field Supervisors and prohibited the appellant from filling up A
the vacancies by making appointments to the post of Field Supervisors from
outside the list prepared in May, 1984 in Civil Appeal Nos. 2650-55 of 1993.
By the said common judgment the High Court also directed the appellant
to appoint the respondent in Civil Appeal No. 2649 of 1993 as Probationary
Officer.
B
The respondent filed writ pet1t10ns contending inter alia the an
advertisement had been issued inviting applications for 35 posts of Proba-
tionary Officers (Branch Managers) and 35 posts of Field Supervisors on
18.7.1983. The respondents applied for one of the posts of Field Super-
visor/Probationary officer and appeared at the written test conducted by
the appellant for selection. On being declared successful in the written test c
they were also called for interview and finally were included in the list of
selected candidates and as such was eligible to be appointed as Field
Supervisor/Probationary Officer. Subsequent to the said advertisement the
appellant decided to increase the number of posts of Field Supervisors
from 35 to 55 but notwithstanding the respondents' inclusion in the list of D
successful candidates only 26 Field Supervisors and 36 Probationary Of-
ficers were appointed. The life of the panel of successful candidates which
was to remain operative for one year· was extended for a period of six
months by the Board of the Bank in its meeting dated 28.3.1985. But yet
the respondent could not be appointed and on account of disgruntlement
amongst the respondents there was an agitation and ultimately an agree- E
ment was reached between the officers of the bank and the members of
the union and the bank agreed to further extend the life of the panel until
all persons included in the list are absorbed. This agreement was reached
on 16.10.1985. But in spite of the aforesaid agreement no appointments
having been made, they approached the High Court for necessary direction.
F
The bank in its counter-affidavit denied its liability to appoint all the
persons who were in the panel as Field Supervisors or Probationary Of-
ficers. The further stand of the bank was that inclusion of a candidate's
name in the panel does not confer an indefeasible right to be enforced by
way. of issuing a writ of mandamus. The bank also took the stand that in G
accordance with the resolution of the Finance Ministry conveyed to all
banks the life of a Panel lapses after one year, and therefore, respondents
cannot claim any right to be appointed as Field Supervisors or Probation-
ary Officers. Supplementary affidavits were also filed on behalf of the bank
. indicating therein that no posts are available, and therefore, question of
appointment of respondents does not arise. H
528 SUPREME COURT REPORTS (1998) SUPP. 1 S.C.R.

A The High Court by the impugned judgment came to the conclusion
that it cannot be believed that there is no vacancy in the bank to the post
of Field Supervisor. The High Court also relying upon a notification issued
by the Ministry of Home Affairs, Department of Personnnel and Ad-
ministrative Reforms came to the conclusion that list prepared does not
get exhausted after expiry of one year and it remains valid till all the
B candidates mentioned in the list are appointed. According to the High
Court the bank has an obligation to appoint candidates against the
declared vacancies ·and that claim cannot be resisted. With these con-
clusions the High Court directed the bank - appellant to appoint the
respondents as Field Supervisor/Field Officer and hence the present ap-
C peal.

Mr. Mehta, the learned counsel appearing for the appellant con-
tended that an applicant has no indefeasible right to be appointed even if
he is selected and included in the merit list and even if a vacancy exists in
D the post for which the application had been made. But in the case in hand
there did not exist any vacancy, and therefore, the High Court committed
serious error in issuing the impugned direction to appoint the respondents
against the post of Field Supervisor. Mr. Mehta further submitted that the
life of the panel which was drawn on 2.5.1984 expired on 2.5.1985. By virtue
of the decision of the Board the said life has been extended for six i:JlOnths
E and again by \~rtue of the agreement between the parties dated 13.10.1985
it stood further extended by six months and panel expired on 30.4.1986. In
this view of the matter no direction could have been given by the High
Court to issue appointment letters to the respondents by its judgment dated
22nd December, 1992 Mr. Mehta also urged that the High Court com-
mitted serious error in relying upon the notification issued by the Ministry
F of Home Affairs, Department of Personnel and Administrative Reforms

-
on the question of the period for which a panel would remain alive
inasmuch as the said circular of the Home Department has no binding
effect so far as the appellant bank is concerned and on the other hand it
is a circular of the Finance Ministry which is binding and under which the
G life of a panel remains valid for a period of one year from its preparation.
The learnt<d counsel also submitted that the conclmion of the High Court
that vacancy exists is erroneous and in arriving at that conclusion the High
Court relied upon the decision of the bank to open more branches and
consequential creation of vacancies but infact no such branch has been
opened and no vacancy exists. Mr. Mehta lastly submitted that under the ,r,
H constitutional scheme engrafted under Articles 14 and 16 of the Constitu- .:' '

c
R.L. KSHETRIYAG.BANKv. C.B. KAPOOR [PAITANAIK,J.] 529

tion a court can at the most direct consideration of the case of an applicant A
if it finds that he has been denied of such consideration but the court
cannot direct appointment of an applicant against any .post.

Mr. Rakesh Dwivedi, the learned senior counsel appearing for the
respondents did not dispute with the legal proposition that mere inclusion
in the list of successful candidates does not confer an indefeasible right to B
be appointed. He, however, contended that the employer while filling up
of the vacancies for which advertisement had been issued has to act bona
fide and not arbitrarily and in the case in hand the High Court has granted
the relief after coming to the conclusion that there exist vacancies in the
cadre and no justifiable reason had been advanced for not filling up those
vacancies and in such a situation the court would be amply justified in
c
issuing mandamu~ to the employer to consider a case of appointment of
the applicant who after undertaking the test got themselves selected and
are waiting for appomtment. On the basis of assertion made by the appel-
lant in the special leave petition filed in this court to the effect "by 31.12.85
19 more branches were opened" Mr. Dwivedi submitted that the High D
Court was fully justified in coming to the conclusion that there exist
vacancies and non-filling up of those vacancies has rightly been held to be
arbitrary. Mr. Dwivedi, the learned ·senior counsel further submitted that
the bank not having controverted the contention that out of the Field
Supervisors who had been appointed, six of them resigned, even though E
the court specifically directed to give reply, the conclusion that there exist
vacancies in the cadre of Field Supervisors is unassailablr. and as such the
right of the respondents to be appointed against those vacancies cannot
be arbitrarily taken away. The learned counsel ultimately submitted that in
the facts and circumstances of the case in hand there is no infirmity in the
judgment of the High Court requiring interference by this Court. F

In view of rival submission at the Bar the following questions arise
for our consideration :

(I) Is the High Court justified in arriving at the conclusion that G
there exist vacancies in the post of Field Supervisors in the
bank?

(II) Does inclusion of name in the list of selected candidates
confer any right to be appointed which could be enforced by
issuance of a writ of mandamus? H
530 SUPREME COURT REPORTS [1998] SUPP. l S.C.R.

A ,(III) What is the period for which a list of successful candidates
remain alive and after expiry of its life can the the court direct
appoint131ents to be made from the said list?

(IV) Did the agreement dated 13.10.1985 contain any stipulation
B that the list of successful candidates would remain alive until
those in the list are appointed in the bank?

Coming to the first question it transpires that the appellant bank
opened only two branches in the rural area in the year 1982. For extending
C its banks, it had applied to the Reserve Bank of India for 30 new licenses
for opening of new branches. Calculating the number of officers which may
be necessary to man these new branches, advertisement, had been issued
on 18.7.1983 inviting applications for 35 posts of Probationary Officers and
35 posts of Field Supervisors. The appellant then applied to the Reserve
Bank for licenses to open 27 more branches in the year 1983 and during
D 1984 and 1985 similar applications had been made for licenses to open 20
branches in 1984 and 17 branches in the year 1985. In anticipation of grant
of licenses by the Reserve Bank of India and consequential opening of
branches in different rural areas the appellant had taken the decision to
increase the number of posts of Probationary Officers as well as Field
E Supervisors. But as against 94 applications for licenses for opening new
branches in fact only 46 branches had been opened and there could not be
expansion of business activity by opening new branches because of the
revised licensing policy of the Reserve Bank of India issued in October,
1985. The appellant had categorically asserted before the High Court that
F there exist no vacancy in the cadre of Field Supervisor or Probationary
Officer and in view of such assertion it was for the respondents who claim
the right of being appointed to establish that in fact vacancies exist. But we
do not find any reliable materials produced by the respondents from which
a conclusion could be arrived at that there exist vacancies in the bank. The
High Court, however, entered into the arena of calculation basing upon the
G principle that there should be appointment of one Field Officer for 500
accounts as was decided by the Board in its resolution and taking into
account the 46 branches which the bank had the number of vacancies in
the post of Field Supervisors must be much more than 55 and only 26 Field
Supervisors had been appointed pursuant to the advertisement dated
H 18.7.1983. This process of i-:onclusion in our considered opinion is wholly
R.L. KSHETRIYAG. BANKv. C.B. KAPOOR [PATIANAIK,J.] 531

·erroneous and is not permissible for a court in exercise of its jurisdiction A
under Article 226 of the Constitution. As has been stated earlier the
process of selection to different post5 in the bank being made in anticipa-
tion of opening of new branches and the. requirement of officers for new
branches. But that does not mean that at the material point of time in fact
any vacancy exists and at any rate no materials having been produced by
B
the respondents, the court could not have come to the conclusion that
vacancies exist. It is in this connection, it would also be appropriate to
notice that whether six of the Field Supervisors appointed resigned and
thus conse_quential vacancies were available. We have carefully scrutinised
the averments made in the writ petition filed by the respondents in the
High Court as well as the rejoinder· affidavit filed in the said court and wec
do not find any assertion has been made in that regard. From the impugned
judgment, however, it appears that in course of argument a contention in
that regard had been advanced by the respondent and the bank had been
called upon to give its reply but no positive reply had been filed the High
Court jumped to the conclusion that in fact six persons resigned and D
consequential vacancies were there. We, however, are unable to sustain this
line of reasoning of the High Court. The writ petitioners not having made
any averments alleging resigning of six of the Field Supervisors after being
appointed the bank had no obligation to give any reply. In course of hearing
a
if contention had been raised and supporting material is produced then E
the bank might have been obliged to file the specific reply but no such
material appears to have been produced by the writ petitioners before the
High Court and in such context absence of reply by the bank does not ipso
facto ·establishes the contention raised. It is too well settled that the
petitioner who approaches the court invoking the extra-ordinary jurisdic-
tion of the Court under Article 226 must fully aver and establish his rights
F
flowing from the bundle of facts thereby requiring respondent to indicate ·
its stand either by denial or by positive assertions. But in the absence of
any averments in the writ petition or even in the rejoinder affidavit it is not
permissible for a court to arrive at a conclusion on a factual position merely
on the basis of submissions made in course of hearing. The Hi~,h Court, G
therefore, in our view committed serious error in coming to thr .onclusion
that there existed vacancies in the post of Field Supervisor 011 1e materials
produced before it. ln fact the respondents herein who were the petitioners
in the High Court had not produced any material in support of their stand
that vacancies existed and yet appointments have not been made. We are H
532 SUPREME COURT REPORTS [1998) SUPP. 1 S.C.R.

A of the considered opinion that conclusion of the High Court that there
existed vacancies is unsustainable in law and is accordingly set aside.

Coming to the second question, it requires no detailed scrutiny and
it is well established that inclusion of name in the list of successful can-
didates does not confer an indefeasible right to be appointed. It has been ·- -
B so held in the Constitution Bench decision of this Court in the case of
Shankarsan Dash v. Union of India, [1991] 3 SCC 47. In the said case the
court has gone to the extent of following : .

"It is not correct to say- that if a number of vacancies are notified
for appointment and adequate number of candidates are found fit,
c the successful candidates acquire an indefeasible right to be ap-
pointed which cannot be legitimately denied. Ordinarily the
notification merely amounts to an invitation to qualified candidates
to apply for recruitment and on their selection they do not acquire
any right to the post. Unless the relevant recruitment rules so
D indicate, the State is under no legal duty to fill up all or any of the
vacancies."

Mr. Dwivedi, the learned senior counsel for the respondent also did
not join on this principle of law. He, however, had raised the issue on the
E question that there was no justifiable reason for not appointing respondents
in the vacancies which still exist and consequentially the action of the
appellant must be held to be arbitrary. But this submission is devoid of any
force in view of our conclusion on the first question that there did not exist
any vacancy in the post of Field Supervisor or Probationary Officer. In this
view of the matter, neither any right accrued to the respondents on being
F included in the list of successful candidates nor their non-appointment can
be held to be arbitrary or discriminatory.

So far as the third question is concerned, namely, for how long a
panel prepared should be kept alive, it appears that the Government of
India in the Ministry of Finance, Department of Economic Affairs (Bank-
G ing Division) by its letter dated 30th September, 1980 had communicated
to the Chairman of all regional rural banks that the panel should normally
be kept alive only for a period of one year and if any deviation from the
said guidelines becomes necessary in the interest of the bank then it should
be undertaken with the prior permission of the Board of Directors and
H under intimation to the Banking Division. Notwithstanding the aforesaid
R.LKSHETRIYAG.BANKv. C.B.KAPOOR[PATIANAIK,J.] 533

guidelines issued as it was observed that several rural banks still took A
recourse to extending the validity of the panel for long periods stretching
over the 2/3 years on obtaining the approval of the Board, the Ministry of
Finance by its letter dated 19th September, 1983 again communicated to
the Chairman of all regional rural banks that preparation of panels to cover
the requirements of regional rural banks for 2/3 years and then extend the
validity of the panel beyond one year cannot be construed as merely a
B
deviation and it is doubtful if it can be considered even as being in the
interest of the regional rural bank from long term point of view. Under
Section 24 of the Regional Rural Banks Act, 1976, a rural bank in the
discharge of its functions is required to be guided by such directions as the
Central Government may after consultation with the Reserve Bank give in c
regard to matters of policy involving public interest. In view of the aforesaid
provisions of the Act, the directions/guidelines issued by the Central
Government indicating the periods for which the life of a panel would kept
alive has a binding effect on the bank, and therefore, in our considered
opinion so far as the life of the panel prepared by the rural banks are D
concerned it must be held that same remains alive ordinarily for a period
of one year. The High Court committed serious error in relying upon the
circular of the Ministry of Home Affairs, Department of Personnel and
Administrative Reforms to come to the conclusion that the panel remains
alive until all the persons in the panel are appointed. The said conclusion
is wholly erroneous and cannot be sustained. E

Though the panel ordinarily remains alive for one year but in accord- ..
ance with the guidelines of the Government of India, Ministry of Finance,
it would be open to Board to extend the said period under intimation to
the Government in the Banking Division. In the case in hand the resolution F
of the Board dated 28.3.1985 indicates that the life of the panel had been
extended by for a further period of six months, and therefore, after expiry
of the said period it was not open for the court to issue direction to appoint
people from the said panel.

Coming to the next question the answer to the same depends upon G
the terms and conditions of the agreement between the parties dated
16.10.1985. The minutes of discussion as recorded no doubt indicates that
some members of the Board did express their views that the life of the
panel should be extended till the last candidate is absorbed by the bank as
it is the moral and legal responsibility of the bank. It further appears that H
534 SUPREME COURT REPORTS (1998] SUPP. 1 S.C.R.

A it was decided to have the concerted efforts for obtaining licenses for
opening new branches but the very agreement between the parties was to
the effect that list of successful candidates for the appointment of Field
Supervisors and Probationary Officers declared on 2.5.1984 will be valid
for a further period of six months after 31.10.1985 and that the management
B of the bank will appoint as far as possible the remaining selected can-
didates in the aforesaid list as soon as possible. This being the terms of
agreement the conclusion is inescapable that such agreement did not
confer a right on the respondents to be appointed to the posts of Field
Supervisors/Probationary Officers and the court would not be justified to
make it enforceable by issuing a writ of mandamus. The High Court,
C therefore, in our considered opinion committed serious error of law in
issuing the impugned directions calling upon the appellant to appoint the
respondents to the posts of Field supervisor/Probationary Officer.

In the premises aforesaid, the impugned judgment dated 22.12.1992
of the High Court is set aside and these appeals are allowed, the writ
D petitions filed by the respondents stand dismissed, however, there will be
no order as to costs.

V.K. Appeals allowed.

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