UNION OF INDIA AND ORS.versusN.R. BANERJEE AND ORS.

A                        UNION OF INDIA AND ORS.
                                        v.
                          N.R. BANERJEE AND ORS.

                             DECEMBER 16, 1996

B                  [K. RAMASWAMY AND G.T. NANAVATI, JJ.]

         Indian Ordinance Factories Service Rules:

          Indian Ordinance Factories-Promotion to the post of Senior General
C Manager-Preparation of panel-Proposal for filling the vacancies sent to
  Ministry on December 22, 1993-Communication of approval by Ministry to
  UPSC on Febrnary 8, 1994-ACRs of eligible candidates approved on August
  16, 1994-Meeting of DPC on March 15, 1995-Direction by Tribunal that
  Government should ignore the ACRs for the years 1994 and consider the
  candidates eligible upto March, 1993--Held direction given by Tribunal was
D in accordance with the procedure.
          S.K Rizvi & Ors. v. Union of India & Ors., [1993] Supp. 3 SCC 575,
    referred to.

          Service Law-Promotio~epartmental Promotion Commit-
E tee-Functions and composition of-Guidelines issued by Govern-
    ment-Judging the suitability of officers--Frequency of meeting of D.P.C.
    Preparatory action plan for consideration for promotion.

         Serl(ice Law-Panel-Rights of candidates-Mere inclusion of Ol!f!'S
  name in the list does not confer any right in him to appointment-It is not
F incumbent that all posts may be filled up-But the authority must act
  reasonably, fairly end in public interest and omission thereof should not be-
  arbitrary.

         Shankarasan Dash v. Union of India, [1991) 2 SCR 567; Babita
                                                                                  ..
G Prasaad & Ors. v. State of Bihar & Ors., [1993) Supp. 3 SCC 268; Union
  Territory of Chandigarh v. Dilbagh Singh & Ors., [1993) 1 SCC 154; State of
  Bihar & Ors. v. Secretariat Assistant Successful Examines Union & Ors.,
   [1994) 1 SCC 126 and Nagar Mahapalika Kanpur v. Vinod Kumar Srivas-
  tava, AIR (1987) SC 847, referred to.

H         Service Law-Confidential Repo~bject of-A.C.Rs. should be writ-
                                        166
                  UNION OF INDIA v. N.R. BANERJEE                      167
                                                      0
 ten by competent officer and approved by superior officer objectively and! A
 impaltially.

       State Bank of lndip. & Ors. v. Kp.shinath Kiter & Ors., (1996) 7 SCC
 762, referred to.

       CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 16986-87               B
 of 1996.

       From the Judgment and Order dated 14.8.96 of the Central Ad-
 ministrative Tribunal at Jabalpur, in 0.A. Nos. 219/95 and '237 of 1996.

      Altaf Ahmad, Additional Solicitor General, N.N. Goswami, Mrs.
                                                                              c
 Anil Katiyar and T.V. Ratanam for the Appellants.

      K.M. Reddy S.K. Mehta, Dhruv Mehta, Fazlin Anam and Ms.
 Monita Jairath, for the Respondents.
                                                                              D
      The following order of the Court was delivered :

       Leave granted.

         These appeals by special leave arise from the orders of the Central
  Administrative Tribunal, Jabalpur Bench, made on August 14, 1996 in OA E
  Nos. 219/95 and '237/96. the controversy involved relates to promotion to
  the post of Senior General Manager in the Indian Ordinance Factories
  under India Ordinance Factories Services Rules. The question for con-
  sideration is: as to when the vacancies in the above posts would arise? The
  grade and scale of pay for the said post is Rs. 3700-8000. For the year F
  1994-95, panel of successful candidates was required to be prepared.
  According to the appellants, there were no clear vacancies as on April
  1994. Four members in the above grade were to retire in that year. Proposal
  for filling up the ensuring vacancies from Ordinance Factory Board was
  sent to the Ministry on December 22, 1993. The Ministry had coinmuni- G
  cated to the Union Public Service Commission its approval on February 8,
  1994. AC.Rs. of the eligible candidates were approved on August 16, 1994
  and the incumbent members joined as members of the Board on August
. 22, 1994, September 03, 1994, October 6, 1994 and March 1, 1995. Conse-
  quently the D.P.C. met on March 15, 1995 for selection of Officers to fill
  up the four vacancies.                                                      H
    168                   SUPREME COURT REPORTS[1996] SUPP. 10 S.C.R.

A        On this factual matrix, it is contended for the appellants that the
  crucial date for the D.P.C. meeting for selection should be April or May
  1995 for selection of candidates to fill up the vacancies of the year 1994-95.
  The AC.Rs. recorded of all the candidates falling within the zone of
  consideration and approved by the Government, as on March 31, 1994, are
  required to be looked into and merits adjudged. The Tribunal, therefore,
B
  was not right in directing the government to ignore the AC.Rs. for the
  year 1994 and consideration of the candidates eligible by then upto March,
  1993. The D.P.C. was to be constituted as on April 1, 1994. Resultantly,
  the direction were given in paragraphs 25 and 28 for consequential action.
  Shri Altaf Ahmed, learned Additional Solicitor General, contends that the
c view of the Tribunal is not correct in law. As per the procedure, prepara-
  tion of the panel of candidates for consideration by the D.P.C. to fill up
  to clear vacancies as on April 1994 is necessary. AC.Rs. are prepared on
  the basis of the performance during financial year which would be October
  1 of the year. In this case, the AC.Rs. of the incumbents are written on the
D financial year basis. It was approved by the Government in March 31, 1995.
  Therefore, the D.P.C. cold not have got approved AC.Rs. before that
  date, namely, as held by the Tribunal on March 19, 1993. The direction,
  therefore, that the D.P.C. in its proceedings should take into consideration
  AC.Rs. of all the eligible candidates as on April, 1993 is incorrect.
  Though, prima f acie, we are impressed with the arguments of Shri Altaf
E Ahmed, on deeper probe and on going through the procedure laid by the
  Ministry of Personnel and Training, we find no force in the contention.
  Preparation of the action plan for consideration by the D.P.C. of the
  respective claims of the officers within the Zone and thereafter for setting
  in motion the preparation of penal on yearwise basis, is elaborately men-
F tioned. In case of their failure to do so, what further procedure is required
  to be followed is also indicated in the rules. It thereby manifests the
  intention of the rule-maker that the appellant-Government should estimate
   the anticipated vacancies, regnlar vacancies and also vacancies arising
   thereafter due to various contingencies and it should also get the AC.Rs.
G prepared and approved. It is also made clear that the D.P.C. should sit on
   regular basis to consider the cases of the eligible candidates within the
   zone of consideration. .The object is clear that the Government should
   keep the panel ready in advance so that the vacancies arising soon there-
   after may be filled up from amongst the approved candidates whose names
   appear in the panel. In that behalf, it is seen that in the guidelines issued
H by the Government in Part I of clause (49) dealing with functions and
                 UNION OF INDIA v. N.R. BANERTEE                       169 I

composition of Departmental Promotion Committee etc. necessary A
guidelines have been enumerated. It envisages that a post is filled up by
promotion where the Recruitment Rules so provide. In making promotions,
it should be ensured that suitability of the candidates for promotion is
considered in an objective and impartial manner. In other words, the
consideration of the candidate is not clouded by any other extraneous B
considerations like caste, creed, colour, sect, religion or region. In con-
sideration of claims, merit alone should enter into objective and impartial
assessments. The object appears to be that the AC.Rs. be written by
competent officer and approved by superior officer objectively and impar-
tially without being influenced by any extraneous and irrelevant considera-
tion, to augment efficiency in public service and to improve competence. C
For the purpose of selection, Department Promotion Committee should be
formed in each Ministry/DepartmenUOffice, whenever an occasion arises,
for promotions/confirmations etc. The D .P .Cs. so constituted shall judge
the suitability of officers for :

      (a) promotions to selection as well as non-selection posts;
                                                                               D

      (b) confirmation in their respective grades/posts;

      (c) assessinent of the work and conduct of probationers for the
purpose of determining their suitability for retention in service or their     E
discharge from it or extending their probation; and

       (d) consideration of cases of Government servants for crossing the
efficiency bar.

      Rule 2.1 relates to composition of the D.P.C. for Group A and
                                                                               F
Group B Officers. Members included in DPCs should be officers who are
at least one step above the posts in which promotion/confirmation is be
made as indicated thereunder. This is consistent with the law laid by this
Court in State Bank of India & Ors. v. Kashinath Kher & Ors., [1996] 8 SCC
762 wherein it was held that the object of writing the confidential report is G
two-fold, i.e., to give an opportunity to the officer to remove deficiencies
and to inculcate discipline. Secondly, it seeks to serve improvement of
quality and excellence and efficiency of public service. The officer should
show objectivity, impartiality and fair assessment without any prejudices
whatsoever with the highest sense of responsibility alone to inculcate H
    170                    SUPREME COURT REPORTS[1996] SUPP. ~0 S.C.R.

A   devotion to duty, honesty and integrity to improve excellence of the in-
    dividual officer. Lest the officers get demoralised which would be
    deleterious to his efficacy and efficiency of public service, the confidential
    reports should be written by a superior officer of high rank. There should
    be another higher officer in rank above the officer who has written con-
B   fidential report to review such report.

           Part II of the guidelines relating to the frequency of meeting of the
    D.P.C. Para 3.1 indicates that the D.P.Cs. should be convened at regular
    annual intervals to draw panels which could be utilised\for making promo-
    tions against the vacancies occurring during the course of a year. In other
C   words, the life of the penal is one year. For this purpose, it is essential for
    the concerned appointing authorities to initiate action to fill up the existing
    as well as anticipated vacancies well in advance of the expiry of the
    previous panel, by collecting relevant documents like AC.Rs., integrity
    certificates, seniority list etc. for placing before the D.P.C.
D
           D.P.Cs. should be convened every year, if necessary, on a fixed date,
    i.e. 1st of April or May, in the middle of the para, by way of amendment
    brought on May 13, 1995, it postulates that very often action for holding
    D.P.C. meeting is initiated after the vacancy has arisen. This results in
E   undue delay in filling up of vacancies and causes dissatisfaction among
    those who are eligible for promotion. It may be indicated that regular
    meeting of D.P. C. should be held every year for each category of posts so that
    approved select panel is available in advance for making promotions against
    vacancies arising every year. Under para 3.2, the requirement of convening
    annual meetings of the D.P.C. should be dispensed with only after a
F   certificate has been issued by the appointing authority that there are no
    vacancies to be filled by promotion or no officers are due for confirmations
    during the year in question. It would, thus, be seen that D.P.Cs. are required
  to sit every year, regularly on or before 1st April or 1st May of the year to
  fill up the vacancies likely to arise in the year for being filled up. The
G required material should be collected in advance and merit list finalised by
  the appointing authorities and placed before the D.P.Cs. for consideration.
  This requirement can be dispensed with only after a certificate is issued by
  the appointing authority that there are no vacancies to be filled by promo-
  tion, or that no officers are due for confirmation, during the year in
H question.
                 UNION OF INDIA v. N.R. BANERJEE                      171

     Part III deals with preparatory action plan for consideration for A
promotion. Para 4.1 reads as under:

        "It is essential that the number of vacancies in respect of which a
        panel is to be prepared by a D PC should be estimated as accurately
        as possible. For this purpose, the vacancies to be taken into B
        account should be the clear vacancies arising in a post/grade/ser-
        vice due to death, retirement, resignation, regular long term
        promotion and deputation or from creation of additional posts on
        a long terms. As regard vacancies arising out of deputation, only
        those cases of deputation for periods exceeding one year should C
        be taken into account, due note, however, being kept also of the
        number of the deputationists likely to return to the cadre and who
        have to be provided for. Purely short term vacancies created as a
        result of officers proceeding on leave, or on deputation for a
        shorter period, training etc., should not be taken into account for
        the purpose of preparation of a panel. In cases where there has D
        been delay in holding DPCs for a year or more, vacancies should
        be indicated year-wise separately."

      Crucial date for determining eligibility has been dealt with there-
under. By an amendment brought w.e.f. July 19, 1989, it is stated that       E
relevant dates for determ.iJYng eligibility of the officers for promotion
would be, where AC.Rs. are written calendar yearwise, 1st July of the year
and where the AC.Rs. are written financial yearwise, 1st October of that
year. The other details prescribed in Chapter IV are not material for the
purpose of this case, Part 6.4.1. deals with preparation of yearwise by      F
D.P.C. which reads as under:

        "Where for reasons beyond control, the DPC could not be held in
        year(s), even though the vacancies arose during that year (or
        years), the first DPC that meets thereafter should follow the G
        following procedures:

        (i)   Determine the actual number of regular vacancies that arose
              in each of the previous year(s) immediately preceding and
              the actual number of regular vacancies proposed to be filled
              in the current year separately.                              H
    172                    SUPREME COURT REPORTS[1996] SUPP. 10 S.C.R.

A            (ii) Consider in respect of each of the years those offices dnly
                                                                             1
                  who would be within the field of choice with reference to the
                  vacancies of each year starting with the earliest year onwards.

             (iii) Prepare a 'Select list' by placing the select list of the earlier
                   year above the one for the next year and so on:
B
          It would, thus, be seen that the authorities are required to anticipate
    in advance the vacancies for promotion on regular basis including long
    term deputation posts and additional posts created and then to take the
    action plan in finalising the AC.Rs. preparation of the select list and place
C   necessary material before the D.P.C. for consideration of the candidates
    within the zone of consideration, as are found eligible for the relevant
    year/years.

          D.P.C. in the present case was directed to consider the cases of all
D the eligible candidates within the zone of consideration so that there will
    not be any heart burning among the eligible persons whose claims have
    been withheld for consideration for promotion to the higher post. In S.K.
    Rizvi & Ors. v. Union of India & Ors., [1993) -Supp. 3 SCC 575 the
    mandatory duty of the preparation of the select list of the officers for
    promotion to the All India Services has been indicated in para 35 of the
E   judgment at page/605 thus; "We, therefore, hold that preparation of the
    :;elect list every year is mandatory . It would subserve the object of the Act
    and the Rules and afford an equal opportunity to the promotee officers to
    reach higher echelons of the service. The dereliction of the statutory duty
    must satisfactorily be accounted for by the State Government concerned
    and this Court takes serious not of wanton infraction".
F
          It would thus be seen that the claims of the candidates eligible have
  to be considered for promotion objectively and dispassionately, with a
  sense of achieving many-fold purpose (1) affording an opportunity to an
  incumbent to improve excellence, honestly, integrity, devotion to public
G duty; (2) inculcating discipline in service; (3) afford opportunity to every
  eligible officer within zone of consideration for promotion to higher post
  or office; and (4) ensuing that the Committee regularly meets and considers
  their claim objectively, impartially with high sense of responsibility in
  accordance with the procedure and finalisation of the list in advance so as
H to fill up vacancies arising in the year from the approved panel without any
                  UNION OF INDIA v. N.R. BANERJEE                         173

undue delay. They are the salutory principles, and form the purpose and A
the policy behind the above rules and the Government should follow them.

       Considered from that perspective, the question arises: whether the
view taken by the Tribunal is justified in law? It is true that filling up of
the posts are for clear or anticipated vacancies arising in the year. It is      B
settled law that mere inclusion of one's name in the list does not confer
any right in him/her to appointment. It is not incumbent that all posts may
be filled up. But the authority must act reasonably, fairly and in public
interest and omission thereof should not be arbitrary. In Shankarasan Dash
v. Union of India, (1991] 2 SCR 567, the Constitution Bench had held that
inclusion of the name of a candidate in a merit list does not confer any         C
right to be selected unless the relevant recruitment rules so indicate. The
State is under no legal duty to fill up, all or any of the vacancies even
though the State acts in arbitrary manner. In Babita Prasad & Ors. v. State
of Bihar & Ors., (1993] Supp. 3 SCC 268 it was held that mere inclusion of
one's name in the panel does not confer on him/her any indefeasible right        D
 to appointment. It was further held that the purpose of making panel was
 to finalise the list of eligible candidates for appointment. The preparation
of the panel should be to the extent of the notified or anticipated vacancies.
Unduly wrong panel should not be operated. In Union Territory of Chan-
digarh v. Dilbagh Singh & Ors., [1993] 1SCC154 it was held that the mere
fact that a candidate'~ name finds a place in the select list as a selected      E
candidate for appointment to a po;;t, does not confer on him/her an
indefeasible right to be appointed in such post in the absence of any
specific rule entitling him to such appointment. In State of Bihar & Ors. v.
Secretariat Assistant Successful Examinees Union 1986 & Ors., [1994] 1 SCC
 126 it was held that a person who is selected and empanelled does not on        F
 account of empanelment alone acquire any indefeasible right to appoint-
ment. Empanelment is, at the best, a condition of eligibility for the pur-
poses of appointment and that by itself does not amount to selection or
creation of a vested right to appointment unless relevant rules state to the
contrary. -However, in the light of the above principles and in the light of     G
the clear rules extracted hereinbefore, it is seen that the exercise of
preparation of the panel is undertaken well in advance to fill up the clear
vacancies or anticipated vacancies. The preparation and finalisation of the
yearly panel, unless duly certified by the appointing authority that no
vacancy would arise or no suitable candidate was available, is a mandatory
requirement. If the annual panel could not be prepared for any justifiable       H
    174                   SUPREME COURT REPORTS[1996] SUPP. 10 S.C.R.

A reason, yearwise panel of all the eligible candidates within the zone of
    consideration for filling up the vacancies each year should be prepared and
    appointment made in accordance therewith. In Nagar Mahapalika, Kanpur
    v. Vinod Kumar Srivastava, AIR (1987) SC 847, this Court had pointed out
    with respect to the proscription of the limitation of one year of the waiting
B   list thus :

            "The reason underlying the limitation of the period of list for one
            year is obviously to ensure that other qualified persons are not
            deprived of their chances of applying for the post in the succeeding
            year and being selected for appointment."
c        · It is true that the material furnished before us would indicate that
    action was taken on December 22, 1993 by the Ordinance Factory Board
    and circulated for action to be taken by the Government and thereafter the
    Union Public Service Commission was consulted. Action taken on this
    material should have been taken much earlier to the date on which it was
D   taken since they knew that four members were due to retire in August,
    September, October 1994 and March 1995. These were anticipated vacan-
    cie5 likely to arise on permanent basis and promotion to them was to be
    made on regular basis. In other words, they were all clear vacancies. So
    they were to be finalised before April 1994 ·and the confidential reports
    should have been approved before 31st March 1993 and all eligible can-
E   didates within the zone of consideration as on the date of D.P.C. were
    entitled to be considered. The direction given by the Tribunal referred to
    above is clearly in accordance with the procedure indicated hereinbefore.
    Therefore, we do not find that the orders are vitiated by any error of law
    warranting interferenq:.
F
           The appeals are accordingly dismissed. No costs. Since the Tribunal
    has given time to constitute the D.P.C. and finalise the matter within 45
    days, ·time is extended for 45 days from today. It is needless to mention
    that all those found eligible are required to be appointed.

G T.N.A.                                                     Appeals dismissed.