Promotion policy under valid service regulations is not invalid merely because separate regulation-making procedure was not followed.

Regulation 17(1) of the Andhra Bank Officers' Service Regulations and the related promotion policy were not invalid for non-compliance with Section 19 procedure. The Board of Directors, acting under the Banking Companies (Acquisition and Transfer of Undertakings) Act, was empowered to frame regulations with RBI consultation and prior Central Government sanction, and the record showed that approval had been obtained. The promotion policy was a distinct, guided exercise under a valid regulation, informed by Government guidelines, and did not require the separate procedural steps applicable to framing or amending regulations. The challenge to the regulation and policy therefore failed, and the High Court's view was rejected.

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Issues: Whether Regulation 17(1) of the Andhra Bank (Officers') Service Regulations, 1982 and the promotion policy framed under it were invalid for want of compliance with the procedural requirements of Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.

Analysis: The Board of Directors of a corresponding new bank was empowered under the Act to frame regulations after consultation with the Reserve Bank of India and previous sanction of the Central Government. Regulation 17 required promotions to be made in accordance with the policy laid down by the Board having regard to Government guidelines, and the record showed that the regulations had been framed with the requisite approval. The policy for promotions was distinct from the regulation-making procedure under Section 19. Once validly framed, the regulation became part of the statute, and the power to lay down promotion policy from time to time was a permissible and guided exercise of delegated authority. The provision did not confer unguided or arbitrary power, and the procedural requirements for framing or amending regulations were not applicable to the formulation of the promotion policy under Regulation 17.

Conclusion: The challenge to the promotion policy and Regulation 17(1) failed; the High Court's view was erroneous and the appellant was entitled to succeed.

Ratio Decidendi: A promotion policy framed under a validly made regulation, which itself is guided by statutory directions and Government guidelines, is not invalid merely because the separate procedural requirements for making regulations were not independently followed for the policy decision.

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