Holding

The promotion policy, including the use of written‑test marks as the primary shortlisting criterion, is not arbitrary, discriminatory or irrational and is therefore upheld.

Summary

The appellants challenged the State Bank of India's promotion policy that reserves 35% of vacancies for a Merit Channel and shortlists candidates for interview based solely on written‑test marks. They argued that this criterion was arbitrary and excluded meritorious candidates whose aggregate scores (including seniority, performance appraisal and other components) were higher. The Bank contended that the policy aims to attract academically brilliant officers by offering accelerated promotion and that the written test is the appropriate measure of current merit. The Supreme Court examined the policy, the circular of 13‑September‑1989, and allegations of unfair means in the written test, and held that the policy is a legitimate, non‑arbitrary means of achieving a laudable public‑interest objective. Consequently, the Court dismissed the appeals, finding no discrimination or irrationality in the promotion scheme.

Issues considered

Whether the SBI promotion policy that reserves vacancies for a Merit Channel and uses written‑test marks alone for shortlisting is arbitrary, discriminatory or irrational.
Whether the circular dated 13‑September‑1989, applied to the 1989 examination, is valid and not retrospectively applied in violation of procedural fairness.
Whether allegations of unfair means in the written‑test centres affect the validity of the promotion results.

Subjects

promotion policymerit channelseniority channelarbitrarinessdiscriminationbankingpublic interestselection criteriawritten testinterviewservice record

Judgment

S.P. BISWAS AND OTHERS ETC.
v.
A
STATE BANK OF INDIA AND OTHERS.

AUGUST 27, 1991

[L.M. SHARMA AND J.S. VERMA, JJ.] B·
Civil Service-Promotion to Middle Management Grade II of th<'
State Bank of India-'-'Promotion Policy dated 31. 10. 1983 read with
Circular dated 13:9. 1989-Procedure mentioned-Whether arbitrary.

Bank-Service-Promotion to Middle Management Grade II oj
State Bank of lndia:--Promotion policy-Whether discriminatory. c

The appellants being aggrieved by the promotion policy of the
respondent-Bank dated 31.10.1983 read with the Circular dated
13.9.1989 for promotion from the cadre of Junior Management Grade-I
to Middle Management Grade-II, moved the High Courts under Article D
226 of the Constitution:

The policy provides for two channels for promotion, namely, the
Merit Channel and the Seniority Channel. For filling vacancies by
promotion from the cadre of Junior Management Grade-I to that of
Middle Management Grade-II, 65% of the total vacancies were reserved E
for the Seniority Channel and the remaining 35% for the Merit
Channel.

The criterion mentioned in the policy for the Merit Channel pro-
vides 40 per cent marks for written test, JO per cent marks for seniority,
20 per cent marks for performance appraisal, 20 per cent m~rks for F
interview and the remaining 10 per cent marks for passing the examina-
tion held by the Bankers' Institute.

The High Courts dismissed the writ applications, against which
the appeals were filed in this Court.
G
The appellants contended that the marks under all other heads
amounting to a maximum of 80 per cent instead of the maximum of 40
per cent presc;-ibed for the written test should be the proper criterion to
call a candidate for inter. i~w in order to make a proper selection on the
basis of merit; that by taking into account the marks of written test
alofe there is exclusion of other meritorious candidates whose aggregate H

769
770 SUPREME COURT REPORTS I 1991] 3 S.C.R.

A including the marks obtained under the other heads may exceed the
corresponding aggregate of marks of candidates obtaining higher
marks in written test alone. On this basis the policy for tilling vacancies
from the Mer~_,.Channel by promotion was alleged to be arbitrary. t-
•
The respondent-Bank, contended that the provision for the Merit
B Channel for promotion was made in the policy to give accelerated pro-
motion to the academically brilliant persons with the object of provid-
ing incentive to them and thereby improving the quality of personnel in
the higher cadre; that the policy of deciding merit on the basis of writ-
ten test alone has been consistently followed and the Circular dated
13.9.1989 was merely a clarification of the manner of preparation of the
Select List to make the selection more objective and to yield better
c results by getting the most meritorious candidates from all circles.

Dismissing the appeals, this Court,

HELD: 1. Keeping in view the laudable object of attracting
D academically brilliant candidates into the Bank's service as officers by
direct recruitment by giving incentive of accelerated promotion to the
most meritorious amongst them who. maintain a high standard of
achievement is conducive to public interest and cannot be faulted. [773C I 'f

2. Of the several heads under which the marks are divided for
E promotion to Merit Channel, written test and interview are the only
ones which depend on the current performance. The marks under the
remaining three heads of seniority, performance appraisal and
C.A.1.1.B. (passing of examination held by Bank's Institute) relate to
past performance of the candidate which are matters of record. It is, _,-( ~ ·
therefore, the appraisal of the current performance by written test and
F interview which alom' is the real part for a proper appraisal of the
current performance of the candidate for the purpose of assessing his
merit for promotion through the Merit Channel. In this situation, if the
marks obtained in the written test alone are taken into account for
preparing the Select List to call candidates for an interview depending
upon the number of vacancies available in Merit Channel the criterion
G adopted cannot be termed arbitrary. [773C-F]

3. The marks obtained for seniority, performance appraisal and ··"
C.A.1.1.B. are based on service record and not on appraisal of the
candidate by a mode independent of service record for assessing the true
current worth of the candidate. Since, equal opportunity is available to
H all for competing through the Merit Channel, in addition to the
S.P. BISWAS v. S.B.l. {VERMA, J.{ 771

prospects through the Seniority Channel, the policy adopted cannot be
treated as irrational, discriminatory or arbitrary. [773F-G I
A

CIVIL APPELLATE JURISDICTION: Civil Appeal No.
1774 of 1990.

From the Judgment'and Order dated 14.2.1990 of the Delhi High B
Court in C.W.P. No. 13 of 1990.
WITH
CIVIL APPEAL No. 4457 of 1990.
==>'..
··--( D.V. Sehgal, A.K. Goel, Mrs. Sheela Goel and K.K. Mohan for
the Appellants.
c
Shanti Bhushan, S.S. Sharma, R.P. Kapur and Sanjay Kapur for
the Respondent.

The Judgment of the Court was delivered by D

VERMA, J. These appeals by special leave are disposed of by
this common judgment since they involve common questions. Civil
Appeal No. 1774 of 1990 is against the judgment of the Delhi High
Court wh.ile Civil Appeal No. 4457 of 1990 arises out of a similar
judgment of the Punja~ & Haryana \iigh Court. E

The appellants in both these appeals are aggrieved by the promo-
tion policy of the respondent, the State Bank of India contained in
. Annexure 'A' .dated 31. 10.1983 read with the Circular dated 13. 9 .1989
for promotion "from the cadre of Junior Management Grade-I
(Rs.1175-2675) to Middle Management Grade-II (Rs.1825-2925). The F
· policy provides for t,wo channels for promotion, namely, the Merit
Channel and the Senimity Channel. For filling vacancies by promotion
from the cadre of Junior Management ·Grade-I to that of Middle
Management Grade-II, 65% of the total vacancies were reserved for
the Seniority Channel and the remaining 3.5% for the Merit Channel.
The challenge in these appeals is to the filling by promotion of the G
vacancies through the Merit Channel. The criterion mentioned in the
policy for the Merit Channel provides 40 per cent marks for written
test, 10 per cent marks for seniority, 20 per cent marks for perfor-
mance appraisal, 20 per cent marks for interview and the remaining 10
per cent marks for passing the examination held by the Bankers' Insti-
tute called C.A.l.l.B. The procedure adopted for taking into account H
772 SUPREME COURT REPORTS [19911 3 S.C.R.

the marks obtained in the written test alone for shortlisting or screen-
A
ing instead of total of marks under all heads except interview for
calling a candidate for interview is challenged as arbitrary. It is con-
tended that the marks under all other heads amounting to a maximum
or 80 per cent instead of the maximum of 40 per.cent prescribed for the
written test should be the proper criterion to' call a candidate for
B interview in order to make a proper selection on the basis of
merit. It is urged on behalf of the appellants that by taking into
account the marks of written test alone there is exclusion of other
meritorious candidates whose aggregate including the marks obtained
under the other heads may exceed the corresponding aggregate of
marks of candidates obtaining higher marks in written test alone. On
this basis the policy for filling vacancies from the Merit Channel by
c promotion is alleged to be arbitrary. This is the common grievance in
both these appeals. An additional point urged in Civil Appeal No.
1774 of 1990 alone is that unfair means were adopted by some candi-
dates at some centres in a particular circle where written tests were
held which has vitiated the result of the written test.
D
On behalf of the respondent-Bank,' all the relevant documents
were produced to negative both these submissions. It was urged by
learned counsel for the respondent that the provision for the Merit
Channel for promotion was made in the policy to give accelerated
promotion to the academically brilliant persons with the object of
E providing incentive to them and thereby improving the quality of
personnel in the higher cadre. He pointed out that the policy of decid-
ing merit on the basis of written test alone has been consistently fol-
lowed and the Circular dated 13.9. i989 was merely a clarification of
the manner of preparation of the Select List to make the selection
more objective and to yield better results by getting the most meritori-
F ous candidates from all circles. This mode of preparation of Select List
was adopted in 1989 also to overcome the deficiencies pointed out in
the earlier years. The opject of choosing the most meritorious persons
through this channel is better achieved by adopting the performance in
the written· test as the predominent factor for selection on the basis of
merit. One of the attendant benefits achieved thereby is also to attract
G more brilliant people into the Banking service with the prospects of
accelerated promotion to the more meritorious persons. The entry
point for officers by direct recruitment in the State Bank of India being
the Junior Management Grade-I, the prospect of the very first promo-
tion being accelerated for academically brilliant persons provides grea-
ter incentive to the brilliant persons joining the service. This is the
H justification given for adopting the policy of reserving 35 per cent of
S.P. BISWAS v. S.B.I. [VERMA, J.l 773

the promotional vacancies to the next higher cadre through Merit
A
Channel. The object sought .to be achieved in this manner and the
making of such a provision to achieve the object of such a provision
was rightly not assailed before us. The only challenge was to the crite-
rion of marks obtained in the written test alone being the guiding
factor to choose candidates who were to be called for interview.
B
We heard both sides ~t length and also closely scrutinised the
Bank's records relating to the formulation and implementation of the
impugned promotion policy. Our conclusion is that no infirmiiy
rendering this policy arbitrary and, therefore, assailable on that
ground is disclosed. Keeping in view the laudable object of attracting
academically brilliant candidates into the Bank's service.as officers by
direct recruitment by giving incentive of accelerated promotion to the C
most meritorious amongst them who maintain a high standard of
achievement is conducive to public interest and cannot be faulted. Of
the serveral heads under which the marks are divided for promotion to
Merit Channel, written test and interview are the only ones which
depend on the current performance. The marks under the remaining o
three heads of seniority, performance appraisal and C.A.1.1.B.
(passing of examination held by Bank's Institute) relate to past
performance of the candidate which are matters of record. It is, there-
fore, the appraisal of the current performance by written test and
interview which alone is the real part for a proper appraisal of the
current performance of the candidate for the purpose of assessing his E
merit for promotion through the Merit Channel. In this situation, if
the marks obtained in the written test. alone are taken into account for
· preparing the Select List to call candidates for an interview depending
upon the number of vacancies available in Merit Channel, the criterion
adopted cannot be termed arbitrary. As earlier indicated, the marks
obtained for seniority, performance appraisal and C.A.1.1.B. are F
based on service record and not on appraisal of the candidate by a
mode independent of service record for assessing the true current
worth of the candidate. Since, equal opportunity is available to all for
competing through the Merit Channel, in addition to the prospects
through the Seniority Channel, the policy adopted cannot be treated
as irrational, discriminatory or arbitrary. No doubt there is always G
room for improvement and so also in the mode of implementation of
' this policy. The learned counsel for the respondents assured us that the
Bank is vigilant and active in making any improvement which ~s called
for as a result of experience or suggestions from any quarter. The
Bank's endeavour to make the assessment of merit as objective as
possible is also indicated by its efforts in that direction. The record of H
774 SUPREME COURT REPORTS [ 1991) 3 S.C.R.

the Bank placed before us does satisfy us about the genuineness and
A
bona fides of the Bank's endeavour in this direction. It may also be
indicated that the Circular dated 13.9.1989 for preparation of the
Select List which was applied to the examination held thereafter in
1989 was an exercise in the same direction. We are inclined. to agree
with this submission of the learned counsel for the respondents. One
B of the arguments of the learned counsel for the appellants that this
circular was applied ~etrospectively was not substantiated by the facts
since preparation of the list according to this circular in the examina-
tion held in 1989 was made subsequent to the issuance of this circular
and it was an exercise in improvement of the mode of selection.

We do not, therefore, find any merit in the submission on behalf
c of the appellants that the policy framed and the mode of its implemen-
tation for filling some of the promotional posts through the Merit
Channel is discriminatory or arbitrary. This contention is, therefore,
rejected. We may, however, add that if there be any suggestion for a
further improvement in the mode of implementation of this policy the
D same can be given to the management of the respondent-Bank and we
have no doubt, as assured by Shri Shanti Bhushan, the learned counsel
for the respondent-Bank that the worthwhile suggestions, if any,
would be adopted by th~ Bank for future examinations.

The only other point which is confined to Civil Appeal No. 1774
E of 1990 is the allegation of unfair means adopted at some centres
where written test was held in the Delhi Circle. We have scrutinised all
the documents including a Report.dated I. 9.1989 of Mr. V.D. Bhog on
which strong reliance was placed on behalf of the appellants. We are
satisfied that no ground for any interference on this basis is made out.
The relevant records disclosed that an honest attempt was made on the
F part of the management of the Bank to examine all the points raised in
the Report of Mr. V.D. Bhog and otherwise and in cases where an
element of use of unfair means was found, necessary action was taken.
The Report dated 7.12.1989 by the General Manager (Operations) is
relevant in this context and the materials placed before us show that
necessary action was taken by the Bank to exclude the possibility of
G the results being affected by use of unfair means by any candidate and
this was done even before filing of the writ petition by' the appellants.
The ultimate results of the candidates at these centres who appeared
for written test at these centres also assures us that neither was there
any mass copying at these centres nor is the final result shown to have
been influenced by use of unfair means by any candidate. It is also
H disclosed by the records that the complaint which led to the report by
S.P. B!SWAS v. S.B.I. [VERMA, J.J 775

Shri V.D. Bhog was made by twenty-seven candic;lates out of whom A
twenty-four had obtained high marks themselves and out of them
twelve were actually selected by inclusion in the final list of selected
candidates. This additional ground urged on behalf of the appellants in
Civil Appeal No. 1774 of 1990 also cannot_ be accepted.

Consequently, both these appeals fail and are dismissed. No B
costs.

V.P.R. Appeals dismissed.