Holding

The Supreme Court held that there was no insubordination and the disciplinary penalty was unwarranted, but the Selection Board’s procedure was valid and the High Court’s order setting aside the promotion was erroneous.

Summary

The case concerned an Assistant Currency Officer (Grade‑C) of the Reserve Bank of India who was charge‑sheeted under Regulation 32 of the RBI (Staff) Regulations, 1948 for allegedly refusing to perform the duties of a Grade‑B officer, and who also failed to obtain the qualifying marks for promotion to Grade‑D. He challenged both the disciplinary penalty of a permanent one‑stage pay reduction and his non‑selection before the Rajasthan High Court, which set aside the selection and held that no insubordination was proved. On appeal, the Supreme Court examined whether the respondent’s conduct amounted to insubordination and whether the High Court was right to invalidate the selection process adopted by the High‑Power Selection Board. The Court held that the respondent’s explanation showed no willful disobedience, so the penalty was unwarranted, but affirmed that the Selection Board was empowered to determine its own marking scheme and had not acted on extraneous factors, thus the High Court’s order setting aside the promotion was erroneous. Consequently, the appeal was partly allowed: the disciplinary penalty was set aside while the promotion decision was upheld.

Issues considered

Whether the conduct of the respondent amounted to insubordination under Regulation 32 of the RBI (Staff) Regulations, 1948 justifying the disciplinary penalty.
Whether the High Court was correct in setting aside the promotion selection and directing the RBI to consider the respondent for promotion, i.e., the validity of the Selection Board’s procedure and criteria.

Subjects

disciplinary actioninsubordinationpromotionselection boardservice lawReserve Bank of Indiastaff regulationsadministrative lawqualification markshigh power selection board

Judgment

\
J RESERVE BANK OF INDIA AND .ANR. A
v.
C.L. TOORA AND ORS.

APRIL 5, 2004

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

Service Law:

Promotion-Reserve Bank of India-Promotion ji-om Grade-C to Grade-
D posts-Selection by High Power Selection Board-In terms of a policy c
formulated by Management, marks prescribed for service record and interview
as also qualifYing marks out of aggregate marks:__A Bank Officer having
failed to qun/ifjJ in the selection challenging the selection procedure and
criteria adopted by Selection Board-Held, the Board was entitled to formulate
its own procedure-On facts, it cannot be said that Board took into account D
extraneous factors .
.,

·-r Reserve Bank of India (Staff) Regulations, 1948:

Regulation 32-Disciplinary inquiry-Bank Officer-Charge-sheeted for
insubordination as he failed to comply with orders ofsenior officer-Delinquent E
replied that he did all the work except opening and closing the vault as he
never operated vault earlier-Penalty of lowering his substantive pay by one
stage permanent(y-Held, conduct of delinquent was not such as to warrant
disciplinwy action-There is no insubordination or disobedience.
F
~ Respondent No. I, an Assistant Currency Officer Grade-C, in the
appellant-Bank was issued a charge-sheet for insubordination under
Regulation 32 of the Reserve Bank of India (Stafl) Regulations, 1948, on
the ground that he refused to comply with orders of the Currency Officer
by which he was asked to look after the wcrk of another Assistant
Currency Officer Grade B, who had proceeded on casual leave. The G
respondent in his reply to show-cause stated that he looked after all the
work except opening and closing of vault as he had never operated the
valllt earlier. His explanation was not accepted and he was awarded a
minor penalty of lowering his substantive pay by one stage permanently.
847 H
848 SUPREME COURT REPORTS [200-l] 3 S.CR.

A Meanwhile, selection process for promotion from Grade-C to Grade D
commenced and a High Power Selection Board presided by a retired High
Court Judge was constituted. In terms of the policy formulated by the
Management, 200 marks were prescribed for service record and I 00 marks
for interview; and the candidates were required to obtain qualifying marks
B of 170 out of 300. Respondent No. I failed to qualify as he secured only
162 marks. Respondent No. I challenged his non-selection before the High
Court in a writ petition wherein he also challenged the disciplinary
proceedings and the punishment awarded to him.

The High Court held that the non-selection of respondent No. I
C because of the procedure and criteria adopted by the Selection Board was
improper. It set aside the entire selection and directed the appellants to
reframe selection and consider respondent No. I for promotion. The High
Court also held that the charge of insubordination was not proved.
Aggrieved, the Bank filed the present appeal.

D It was contended for the appellant that it was open to the Selection
Board to formulate its own procedure in the matter of allotment of marks
for interview, written test and performance appraisal and the High Court
erred in fixing qualifying marks for interview.

E Allowing the appeal in part, the Court

HELD: I. The High Court erred in setting aside the selection and in
directing the appellant bank to consider respondent No. I for promotion
from 1989. The appellant constituted high power Selection Board presided
by a retired High Court Judge. The Selection Board held interviews of
F candidates from various centers at all India level. The Board was entitled
to formulate its own procedure. On facts it cannot be said that the Board
took into account extraneous factors. (852-D, F-GI

2.1. As regards the penalty imposed on the respondent, the High
G Court was right in holding that the conduct of respondent No. I was not
such as to warrant disciplinary action. [851-CI

There was no misconduct committed by respondent No. I and the
appellant erred in imposing the penalty of lowering his substantive pay
by one stage permanently. There is no insubordination or disobedience
H as alleged. In the preliminary enquiry, respondent No.I has given his
R.a.1. r. c.1.. rnoR1\ IKAl'AIJIA .1.1 849
explanation. He has stated in his reply that he had no experience of opening A
and closing the vault and that he did all the work except opening and
closing of vault. In the circumstances, High Court was right in holding
that there was no foundation for alleged misconduct.
1852-H; 853-A; 851-C-DI

CIVIL APPELL.ATE JURISDICTION : Civil Appeal No. 7803 of B
2002.
-~
From the Judgment and Order dated 12.12.2001 of the Rajasthan High
Court in S.B.C.W.P. No. 5483 of 1990.

Harish N. Salve, H.S. Parihar, Kuldeep Parihar and D.K. Sharma for
c
the Appellant.

Avadh Behari Rohtagi, J.M. Khanna and Ms. Shefali Khanna Sethi for
the Respondent.
D
The Judgment of the Court was delivered by
\
KAPADIA, J, This appeal by special leave is filed by the Reserve
' Bank of India against the judgment and order of the High Court of Rajasthan,
Bench at Jaipur dated 12.12.200 I directing the appellant to consider respondent
no. I for promotion to grade-D ignoring the fact that a high power Selection E
Board presided by a retired Judge of the Bombay High Court had found the
respondent unsuitable for selection to the said grade.

The facts giving rise to this appeal are as follows.

I . On I. I 0. l 98S, the Currency Officer of the appellant asked respondent F
•(
no. I who was Assistant Currency Officer in Grade-C to look after, on
3.10.1988, the duties of M.S. Janagal, Assistant Currency Officer (Grade-B),
who had proceeded suddenly on casual leave. It is the case of the appellant
that respondent no. I herein refused to comply with the orders of the currency
officer stating that he cannot be asked to discharge the functions of Grade- G
B officer. Accordingly, the said respondent was charge-sheeted on 1.12.1989
for insubordination under regulation 32 of the Reserve Bank of India (Staff)
Regulations, 1948 (hereinafter referred to as "the said regulations"). !n the
preliminary enquiry preceding the charge-sheet. the said respondent in reply
to show-cause notice stated that on I. I 0. 1988, seven Grade-B officers were
H
850 SUPREME COURT REPORrS [2004] 3 S.C.R.

A present on duty and only one of them Mr. M.S. Janagal had applied for
casual leave; that he had never operated the vault in the past: that vault duties
were entrusted to Grade-B officers and as such, except in emergency, a
Grade-C officer was entrusted with such duties and, therefore, he did not
intend insubordination. In fact, he pointed out that on 3.10.1988, he did all
B the work of Claims Department except opening and closmg of vault. By his
reply to show-cause notice, he. further pointed out that he was under mental
agony on that day in the background enumerated in para 2 of his reply to the
show-cause notice. The appellant however did not accept the explanation of
the respondent. In the meantime, the appellant undertook selection process in
the matter of promotions of officers from Grade-C to Grade-D. Respondent
c no. I herein was one of the candidates. The appellant constituted a high power
Selection Board presided by Mr. Justice A.S. Ginwala, a retired judge of
Bombay High Court. The Selection Board held several meetings at Calcutta,
New Delhi, Bombay and Bangalore, as promotions were to be made at all
India level. The Selection Board recommended candidates for promotion in
D terms of the executive policy formulated by the Management in I983 and
which was in existence in 1989. Under the said policy, a candidate had to
secure in all 170 marks out of 300 for empanelment for promotion to Grade-
D. Respondent no. I herein secured I62 marks and consequently he failed to
qualify. At this stage, it may be mentioned that the sai<if respondent was
E interviewed at New Delhi center on 2.6.1989, wherein he was successful but
over all he did not secure I 70 marks, hence not found suitable for the panel
year 1989. On 23.10.1990, he filed writ petition No.5483of1990 challenging
the charge-sheet and his non-selection. During the pendency of the writ
pefaion, disciplinary enquiry was completed and the competent authority
imposecl the minor penalty of lowering his substantive pay by one stage
F permanently, against which he filed departmental appeal, which was also
)!
rejected on 4.8. I 994. Respondent no. I filed an amendment application to the
writ petition challenging the enquiry proceedings as well as the order of
punishment. By impugned judgment, the writ petition was allowed on the
ground that the charge of insubordination was not proved. The High Court
G also found fault with the non-selection of respondent no. I on the ground that
the procedure and the criteria adopted by the Selection Board was improper.
It doubted the decision of the Selection Board in awarding only I62 marks
on the ground that the said respondent had obtained the requisite 32 marks
in the interview but he was given only 130 marks on performance appraisal.
H In the circumstances, the entire selection was set aside and the appellants
R.B.I. v. C.L. TOORA [KAPADIA . .I.] 851
were directed to reframe selection and consider the said respondent for A
promotion to scale-D from 1989. Aggrieved, the Reserve Bank of India has
come to this Court by way of this appeal.

Two issues arise for determination, firstly, whether the appellant was
justified in imposing the above penalty of lowering the substantive pay of the B
respondent by one stage permanently; and secondly, whether the High Court
was right in setting aside the entire selection and directing the appellant to
·--< promote respondent no.1 to scale-D w.e.f. 1989.

On the first point, we are of the view that the High Court was right in
coming to the conclusion that the conduct of respondent no. I was not such C
as to warrant disciplinary action. As stated above, in the preliminary enquiry,
respondent no.1 has given his explanation vide letter dated 12.6.1989. We
have gone through the letter, as discussed above. Regulation 32 states that
every employee shall obey directions given to him from time to time by his
superiors. In the present case, we do not find any insubordination or D
disobedience as alleged. He has stated in his reply that he has no experience
of opening and closing the vault and that he did all the work of Claims
Department on 3.10.1988, except opening and closing of vault. In the
circumstances, we are in agreement with the view taken by the High Court
in the matter of disciplinary proceedings that there was no foundation for
alleged misconduct. E
The second issue is whether the High Court was right in setting aside
the entire selection with the direction to the appellant to consider the said
respondent for promotion to scale-D from 1989. Mr. Harish N. Salve, learned
senior counsel appearing on behalf of the appellant submitted that respondent F
No. 1 was interviewed along with other candidates by the Selection Board.
On 29.5.1990, respondent no.1 was advised about his non-selection and
thereafter he had appeared in interview four times i.e. on 8.6.1990, 3.9.1991,
6.4.1992 and 5.2.1993 but was found unsuitable. It was submitted that the
Selection Board was presided by a retired Judge of the High Court of
unquestionable impartiality who had no axe to grind. He contended that it G
was open to the Selection Board to formulate its own procedure in the matter
of allotment of marks for interview, written test and performance appraisal
and that the High Court had erred in fixing qualifying marks for interview.
In this connection, it w.as pointed out that the Selection Board had prescribed
100 marks out of 300 for interview which the High Court has held to be on H
-1 SUPRl·:ME COURT REPORTS [2004] 3 S.C.R.
8)~
A the higher side. He submitted that the High Court had erred in coming to the
conclusion that non-selection of respondent no. I was on account of extraneous
factors. He submitted that the covering letter enclosing the mark-sheet has
been signed by all the members of the selection board. Mr. Salve produced
before us the entire record. Per contra, Mr. A. 8. Rohtagi, learned senior
B counsel appearing on behalf of respondent no. I submitted that the individual
members of the Selection Board have not assigned individual marks in the
mark-sheet and that all the members have allotted equal marks and, therefore,
.....
the procedure was faulty. He submitted that the mark list did not bear the
signatures of the members of the Board though all the members have signed
the forwarding letter. It was urged that no merit list was prepared and no
C policy was produced before the High Court on the basis of which marks
came to be given. He submitted that the respondent was successful in the
interview and for extraneous reasons, he was given less marks for his
performance and consequently he could not obtain 170 marks. It was submitted
that the High Court had examined the entire record and has given finding of
D fact and, therefore, this Court should not interfere in this matter under Article
136 of the Constitution.

We are of the view that the High Court had erred in setting aside the
selection and in directing the appellant bank to consider respondent no. I for
promotion from J 989. The appellant had constituted high power Selection
E Board presided by a retired Judge of the Bombay High Court. The Selection
Board, as stated above, held interviews of candidates from various centers at
all India level. The Selection Board held its sitting at Calcutta, New Delhi,
Bombay and Bangalore. It provided for 200 marks for service records and
100 marks for interview in terms of the policy formulated by the management
F as far back as July, 1983. Under that policy, the candidates were required to
obtain aggregate qualifying marks of 170 out of 300. The Board was entitled
to formulate its own procedure. Moreover, we have perused the records and
proceedings of the Selection Board produced before us. The forwarding letter
enclosing the mark-sheets has been signed by all the members of the Board.
G There is no interpolation in the marks given to the candidates as alleged. On
facts it cannot be said, as held by the High Court, that the Board had taken
into account extraneous factors. Hence, the High Court erred in setting aside
the selection and directing the appellant bank to consider the case of respondent
no. I for promotion to Grade-D from 1989.

H For the aforestated reasons, we hold that there was no misconduct
R.B.I. v. C.L. TOORA [KAPADJA . .I.] 853
committed by respondent no.1 and the appellant had erred in imposing the A
penalty on ·respondent no.1 of lowering his substantive pay by one stage
permanently. However, we hold that the High Court had erred in setting aside
the selection made by the Selection Board and directing the appellant to
reframe selection and consider respondent no. I for promotion to scale-D
from 1989.
B
Accordingly, the appeal stands partly allowed, with no order as to
costs.

R.P. Appeal partly allowed.

)

' ....