1996 (2) TMI 547 - SC - Indian Laws

Supreme Court Upholds Bank's Promotion Policy: Procedural Fairness Emphasized

STATE BANK OF INDIA ETC. Versus KASHINATH KHER & ORS. ETC.

The Supreme Court allowed the appeals, setting aside the High Court's orders. The Bank's promotion policy, requiring completion of service conditions for ... - Issues Involved:1. Eligibility criteria for promotion to Middle Management Grade Scale III (MMGS-III).2. Violation of Article 14 of the Constitution.3. Validity of the Board's relaxation policy.4. Confidential reports and their impact on promotion.5. Retrospective application of promotion rules.6. Procedural fairness in promotion.Detailed Analysis:1. Eligibility Criteria for Promotion to MMGS-III:The respondents, while serving as Middle Management Grade Scale II (MMGS-II) officers in the State Bank of India, challenged the appellant-Bank's policy dated March 21, 1990, and August 6, 1990. The policy required officers to complete two years of line assignment and two years of rural/semi-urban service to be eligible for promotion to MMGS-III. The High Court held that clubbing ineligible officers with eligible ones violated Article 14 and struck down the criteria.2. Violation of Article 14:The respondents argued that clubbing officers who had not completed the required service with those who had was unconstitutional, treating unequals as equals. The Supreme Court found that the Bank's stand was just and fair, noting that the failure to post officers to line assignments and rural/semi-urban services was due to mismanagement at the circle level. The Bank's policy aimed to relieve hardship for officers who were otherwise eligible but had not completed the required service due to no fault of their own. The Court held that the policy did not violate Article 14 as it provided an equitable solution.3. Validity of the Board's Relaxation Policy:The respondents contended that the Board's relaxation of service conditions was illegal. The Supreme Court clarified that the Board did not relax essential service conditions but provided an opportunity for officers to complete the required service. The policy ensured that officers who were otherwise eligible but had not completed the service due to fortuitous circumstances were given a fair chance for promotion. The Court upheld the Board's policy as just, fair, and reasonable.4. Confidential Reports and Their Impact on Promotion:The High Court found the procedure of writing confidential reports by officers of the same rank as violative of natural justice. The Supreme Court agreed, stating that confidential reports should be written by superior officers to ensure objectivity and fairness. The Court directed the appellant to prescribe competent officers for writing and reviewing confidential reports and to ensure that the promotion committee independently assesses the merit and ability of each candidate based on these reports.5. Retrospective Application of Promotion Rules:The respondents argued that the relaxation policy could not be applied retrospectively to vacancies that arose in 1988, 1989, and 1990. The Supreme Court held that the policy decision taken on March 21, 1990, effective from August 1, 1988, was not retrospective application but a measure to fill existing vacancies. The Court distinguished this case from Y.V. Rangaiah vs. J.Sreenivasa Rao, where retrospective application of new rules was deemed inappropriate.6. Procedural Fairness in Promotion:The Supreme Court found that the High Court's direction to promote all officers in List A before considering those in List B was incorrect. The Court directed the appellant to identify officers who voluntarily did not opt for line assignment or rural/semi-urban service and eliminate them from List B. The appellant was instructed to consider all eligible officers from Lists A and B together for promotion, ensuring procedural fairness and adherence to the prescribed criteria.Conclusion:The appeals were allowed, and the High Court's orders were set aside. The appellant was directed to complete the exercise within nine months, ensuring fair consideration for promotion based on the guidelines laid down by the Supreme Court. The application for intervention was allowed.