TaxTMI 
TaxTMI 
1998 (7) TMI 686
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.... the terms and conditions of their appointment and service Section 24 of the Act lays down that in the discharge of its functions a Regional Rural Bank shall be guided by such directions, in regard to matters of policy involving public interest, as the Central Government may, after consultation with the national Bank for Agricultural and Rural Development [hereinafter referred to as 'the National Bank'], give. Under Section 29 of the Act the Central Government has been empowered to make rules, after consultation with the National Bank and sponsor Bank, for carrying out the provisions of the Act, By clause (ba) of sub-section (2) of section 29, which was inserted by the Regional Rural Banks (Amendment) Act, 1987, the Central Government was empowered to make Rules relating to manner in which the officers and other employees of the Regional Rural Bank shall be appointed. In exercise of the powers conferred under Section 29 read with Section 17 of the Act the Central Government framed the Rules which were published vide Notification dated September 28, 1988. Rule 3 of the Rules provides that the Board of Directors of each Regional Rural Bank may, in consultation with its spo....
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....gional Rural Banks in the following terms:- "....... it is, therefore, requested that the Chairman of all the RRBs may be apprised that since the posts of Area Managers/Senior Managers are promotional posts to be filled up 100% by promotion from only one source, the non-selection rule of seniority cum merit has to be applied. This rural envisages promotion by seniority with due consideration to minimum merit/fitness prescribed. Fitness implies that there is nothing against the officer. No disciplinary action is pending against him and none is contemplated. The officer has neither been reprimanded nor any adverse remarks have been conveyed to him in the reasonably recent past. The promotions are meant to be made on the above mentioned consideration." [emphasis supplied ] In accordance with the said circular the National Bank issued a circular dated December 1, 1987 whereby all the Regional Rural Banks were apprised that the matter relating to the promotion of Branch Mangers to the posts of Area/Senior Managers had been examined by it consultation with the Government of India and the Regional Rural Banks were advised as under: - &nb....
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....ds of seniority and that if a post falls vacant it is filled by the person who had served longest in the post immediately below. But the seniority system is so objective that it fails to take any account of personal merit. It is fair to every official except the best ones, an official has nothing to win or lose provided he does not actually become so inefficient that disciplinary action has to be taken against him. The criterion of merit, on the other hand, lays stress on meritorious performance irrespective of seniority and even a person, though junior but much more meritorious performance irrespective of seniority and even a person, though junior but much more meritorious than his seniors, is selected for promotion. The Court has expressed the view that there should be a correct balance between seniority and merit in a proper promotion policy. the criteria of seniority cum-merit' and 'merit-cum- seniority' which take into account seniority as well as merit seek to achieve such a balance. The principle of 'merit-cum-seniority' lays greater emphasis on merit and ability and seniority plays a less significant role. Seniority is to be given weight only when mer....
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....ne and if he is found unfit to discharge the duties of the higher post, he may be passed over and an officer junior to him maybe promoted. In State of Kerala & Anr. v. N.M. Thomas & Ors., 1976 (1) SCR 906, A.N. Ray CJ. has thus explained the criterion of 'seniority-cum-merit':- " With regard to promotion the normal principles are either merit- cum-seniority or seniority-cum-merit. seniority-cum-merit means that given the minimum necessary merit requisite for efficiency of administration, the senior though the less meritorious shall have priority." [p.930] The learned counsel for the Regional Rural Banks and the promoted officers have, however, placed reliance on Para 7(c) of the Second Schedule to the Rules which prescribes that the mode of selection for promotion would be interview and assessment of performance reports for the preceding three years periods and have submitted that under the criterion of 'seniority-cum-merit', as prescribed under the Rules, comparative merit has to be assessed for the purpose of promotion. Reliance has been placed on the following observations in State of Mysore v. C.R. Seshadri & Ors., 1974 (3) SCR 87 : - ....
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.... promotion is a matter of course and that if seniority-cum-merit is the rule, promotion is problematical. Since the relevant rule governing promotion to the post of Deputy Secretary had not been placed before it, the Court was not required to define the criterion of 'seniority-cum-merit' and to delineate the fine distinction between the criterion of 'seniority-cum- merit' and the criterion of 'merit-cum-seniority' in the matter of promotion. In the observations on which reliance has been placed by the learned counsel for the Rural Banks and the promoted officers the distinction between 'seniority-cum-merit' and 'merit-cum-seniority' has been obliterated and both the criterion have been equated. Since comparative assessment of merit is required to be made while applying the criterion of 'merit-cum-seniority' has been obliterated and both the criterion have been equated. Since comparative assessment of merit is required to be made while applying the criterion of 'merit-cum-seniority' ad for 'seniority-cum-merit' no such comparative assessment is required, the aforementioned observations in the case of C.R. Seshadri (supr....
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....he service record of the officer concerned has to be taken into consideration". This judgment, in our opinion, does not make a departure from the law laid down by this Court in the earlier judgments explaining the criterion of 'seniority- cum-merit' because in this case the selection had been made by taking into account the seniority as well as performance and performance was appraised by assigning marks on the basis of performance appraisal and interview. Those who secured 85 marks out of 150 marks were shortlisted for promotion which shows that securing 85 marks out of 150 marks was treated as the minimum standard of merit for purposes of promotion and those who satisfied the said minimum standard were selected for promotion on the basis of seniority. On behalf of the promoted officers it was urged that for the purpose of promotion on the basis of seniority-cum- merit, seniority means the length of service and that among officers who were appointed on the same date and have the same length of service seniority can have no bearing and promotion has to be made on a comparative assessment of merit of such officers. We are unable to agree. while applying the principle of s....
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....Rayalaseema Grameena Bank laid down the following promotion process:- " A) ELIGIBILITY :- The Officers who have put in 8 (Eight) years of service in the Bank in the cadre of branch Manager as on 31-12-1987 are eligible to be considered for the promotion process. B) MODALITIES :- a) Seniority - 45 marks (0.5 marks for each completed month of service over and above the minimum qualifying service) b)Qualification - 5 marks (Minimum qualification applicable to the cadre shall not bereckoned) Post Graduation - 1 Mark Diploma/s - 1 Mark CAIIB - Part I - 1 mark CAIIB - Part II - 2 Marks (c) Leave record - 5 marks (d) Interview - 30 marks (e) Performance - 65 marks 0.2, These promotions will be effective from 1st May, 1988. 0.3. The eligible candidates will be called for the interview directly ( Candidates need not submit any application in this regard) " Following the said promotion process eight Branc....
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....d together by a learned single judge of the High Court who, by his judgment dated September 7, 1993, allowed Writ Petitions Nos. 17263 and 17279 of 1989 and 3546 of 1990 and declared that the promotions made on December 1, 1989 to the post of Area/Senior managers form the post of Branch Manager in the Rayalaseema Grameena Bank were illegal and improper. Writ petition No. 9692 of 1993 filed by P.V. Krishna Murthy, in which the promotions made on May 3, 1988 the 1988 were assailed, was, however, dismissed on the ground of laches. Against the said judgement of the learned single judge Writ Appeals Nos. 1242 of 1993, 1232 of 1993 and 1238 of 1993 were filed by the Chairman, Rayalaseema Grameena Bank, and Writ Appeals Nos. 1233 of 1993 and 1234 of 1993 were filed by the five Branch Managers whose promotions as Area/Senior managers made on December 1, 1989 had been quashed by the learned single Judge. Writ Appeals Nos. 1142 of 1993 and 1224 of 1993 were filed by P.V. Krishnamurthy, the petitioner in Writ Petition No. 3546 of 1990 and Writ Petition No. 9692 of 1993 and Writ Appeal No. 1210 of 1993 was filed by two of the petitioners in Writ Petition No. 17279 of 1989. These appeals relate....
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....he High court, in our opinion, has rightly held that the belated challenge to the promotions made on May 3, 1988 raised by the appellants in these appeals cannot be entertained. Civil Appeals Nos. 3804-3808 of 1996 are, therefore, liable to be dismissed. Writ Appeals Nos. 1242 of 1993, 1232 of 1993 and 1238 of 1993 filed filed by the Rayalaseema Grameena Bank and Writ appeals Nos. 1233 of 1993 and 1234 of 1993 filed by the five Branch managers who were promoted as Area/Senior Managers on the basis of proceedings dated December 1, 1989 were dismissed by the Division bench of the High Court on the view that the Bank had considered the cases of all the eligible officers for promotion to the posts of Area/Senior Managers and only those who secured highest number of marks amongst them were ultimately promoted and that this method of selection is contrary to the principle of 'seniority-cum- merit'. Civil Appeals No. 3799-3803 of 1996 have been filed by the Rayalaseema Grameena Bank, while Civil appeals Nos. 3811-3812 of 1996 have been filed by five Branch managers who have been promoted as Area/Senior managers in the proceeding on December 1, 1989 against this part of the judg....
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.... are eligible for considering the promotion to Area/Senior Manager posts. WEIGHTAGE OF MARKS : (a) Seniority : 55 marks Officers (Managers) who have completed 8 years of service as per SSR of the Bank. (b) For passing CAIIB Part- I : 2 marks CAIIB Part -II 3 marks (c) performance : 25 marks (d) Interview : 15 marks Total 100 marks Further, we observe that many of the Officers (Managers) have not submitted the performance appraisals for the years 1989, 1990 and 1991 to assess their performance. Such officers are advised to submit the performance appraisals so as to reach HO : PSD on or before 31.03.1992. Otherwise, we will be constrained to assess their performance based on he information available with us. A Committee is constituted for the purpose of conduction interview as per Government of India guidelines. The dates of interview will be intimated to the candidates individually, in due course." In the proceeding held on April 20, 1992 five Branch Managers were promoted as Area/Senior Managers. Three Branch Managers, namely, K. Addanki Babu, P. Raghava Rao and V.C. ....
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....nciple of 'seniority-cum-merit' and it virtually amounts to the application of the principle of 'merit-cum-seniority'. We, therefore, do not find any merit in Civil Appeal Nos. 3809-3810 of 1996 and 3798 of 1996 and the same are also liable to be dismissed. We would now take up the Madhya Pradesh group of appeals of appeals which relate to three banks, namely, Baster Kshetriya Gramin Bank, Rewa Sidhi Gramin Bank and chhindwara-Seoni Kshetriya Gramin Bank. The appeals relating to these banks are also being dealt with separately. Baster Kshetriya Gramin Bank: - Selection process for the purpose of promotion to the post of Area Manager/Senior Manager in the Baster Kshetriya Gramin Bank was contained in the circular dated February 16, 1993 . The said selection was made on the basis of interview of all the eligible officers by the Staff Selection Committee as per the Rules and a select list of five persons was prepared and on the basis of the said select list promotions were made. The said promotions were challenged by three officers who, though senior, were no promoted, by filing Writ Petition Nos. 43 and 45 of 1993 in the Madhya Pradesh High court. The said Writ ....
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....nt of his overall performance based on appraisal reports on hm and his potentiality to shoulder higher responsibilities assessed in the interview, duly supplemented by weightages for seniority, job responsibility, placement/posting/mobility". With regard to promotion from Officer to Area/Senior Manager the following promotion criteria were laid down: "Promotion percentage Wightage (a) Seniority Officers (Managers)who havecompleted 8 years of serviceas per SSR of the Bank. 55 marks (b) For passing CAIIB Part- I 2 marks CAIIB Part -II 3 marks (c) performance 25 marks (d) Interview 15 marks Total 100 marksAs regards weightage for seniority it was provided in Paragraph 2.4 that one mark for each completed year of service in the respective cadre/post, subject to a maximum of 15 marks in respect of promotion from Officer to Area/Senior Manager would be give. It was further:- " 2.9. Candidates who have secured less than 40% marks in interview will not be considered for promoti....