C.N.& Ors Vs. Chairman Cauvery Gramina Bank & Ors  INSC 878 (31 July 1996)
Singh (J) Kuldip Singh (J) Ahmad Saghir S. (J) Kuldip Singh, J.
1996 SCALE (5)678
learned single Judge of the Karnataka High Court allowed the bunch-petitions
filed by the respondents and quashed the promotions made by the Cauvery Gramina
Bank, Mysore (the Bank) to the cadre of Senior Managers on the short ground
that the guidelines issued to the Bank by the National Bank for Agricultural
and Rural Development (the NABARD) were not followed while making the
promotions. A Division Bench of the High Court upheld the judgment of the
learned single Judge. The appellants-affected officers-have challenged by way
of this appeal the correctness of the judgment of the learned single Judge and
that of the Division Bench of the High Court.
Bank was sponsored by the State Bank of Mysore and established in October 1976 under the Regional Rural Bank Act.
1976. The NABARD was established in the Year 1982 with a view to look after the
agricultural and rural development in the country. The NABARD has been issuing
guidelines from time to time regarding the conditions of service of the
employees of the rural banks in the country. The NABARD issued a circular dated
December 31, 1984 providing guidelines for
appointments/promotions in the rural banks to the posts of Senior Managers/Area
Managers and General Managers. The relevant part of the circular is as under:
Source of Recruitment : 100% by promotion from amongst officers working in
bank. Promotions will be on the basis of seniority-cum- merit. If suitable
officers are not available internally, these posts could be filled by taking temporarily
officers of the sponsor Banks and other banks/ organizations on
deputation." NABARD issued another circular dated April 7, 1986 which clarified the procedure and
provided for the standard to be adopted for promotions in the rural banks in India.
relevant part of the circular is as under:
effecting promotions, the Board may constitute one or more staff selection
committees depending on the scale of the posts for which the candidates are to
be interviewed, for the purpose of selecting the employees of the bank for
promotion to higher posts. The Committee should have at least three official
directors of the Board excluding Chairman, of which one should be from the
National Bank or the Reserve Bank and one each from sponsor Bank and State Govt.
respectively. Also one member from SC/ST community should be represented in
such committees as indicated in our circular letter dated 9-12-1985. The selection of the eligible candidates should be
based on performance of respective candidates in the bank. The recommendation
of the committees should thereafter have the approval of the Board before
effecting promotions." The Bank issued its own guidelines by the circular
dated July 17, 1986 for appointment to the posts of
Area Managers/Senior Managers and invited applications from eligible officers
to be considered for promotion. The relevant part of the circular is reproduced
question of strengthening the supervisory support at the field as well as at
the Head Office level consequent on growth in the volume of business and
geographical coverage has been examined by the Government of India in
consultation with the NABARD. They have approved, in principle, creation of the
posts of Area Managers/Senior Managers as and when required and justified by
the volume and nature of business. In the light of the guidelines issued by the
NABARD in this regard, the Board of Directors have approved creation of a few
posts of Area Managers and upgradation of a few managers posts at Head office
to Senior Managers posts.
following guidelines have been laid down for appointment to the posts of Area
by promotion form amongst the eligible officers:
suitable officers are not available internally, the posts could be filled- in
by the officers of the sponsor
the eligible officers are being advised separately to appear for promotional
interview." The NABARD issued further guidelines on December 1, 1987 and February 10, 1988 but these instructions are not relevant for our purpose
because the selection in dispute was held in the year 1986.
On July 23, 1986 the Chairman of the Bank
constituted a Director's Committee to consider the cases of eligible officers
for promotion in the light of the guidelines issued by the NABARD from time to
time. The Committee called for interview 32 officers in accordance with their
seniority. In the interview the marks were awarded according to the performance
appraisal forms. The officers who obtained 85 marks out of 150, were shortlisted
for promotion. As a result of the recommendations of the Director's Committee
the promotion orders were issued on July 31, 1986.
main contention of the appellants before the High Court was that the promotions
were made by the Director's Committee primarily on the basis of the performance
appraisal forms which were regularly maintained in respect of each of the
officers working in the Bank. The performance appraisal comprised of matters
such as dimension of work, general intelligence, job knowledge, initiative and
resourcefulness etc. The performance appraisal forms were regularly maintained
in the course of the service and contained a clause regarding overall
suitability for promotion.
appellants were promoted on the basis of the service record maintained by the
Bank in the form of performance appraised. Some of the senior officers who were
not found suitable on comparative consideration of the performance appraisal,
challenged the promotion on the ground that the procedure adopted by the
Director's Committee was in violation of the guidelines issued by the NABARD.
The precise ground of challenge was that the promotions were not made on the
basis of seniority-cum-merit but by way of selection on the basis of interview
held by the Committee. A learned single Judge quashed the promotions holding
that the Bank violated the guidelines of NABARD issued in the Year 1984. The
learned Judge further held that the April 1986 guidelines were not applicable
to promotions in the cadre of Senior Managers. It was not disputed before the
learned judge that the service record of the writ petitioners was adverse.
judgment of the learned single Judge was upheld by the Division Bench of the
High Court. The Division Bench came to the conclusion that the service record
of recent past should have been taken into consideration and in case there was
nothing adverse against an officer he could not be denied promotion on the
ground that some other officer junior to him was more meritorious. According to
the Bench the promotions were made on the basis of selection as much as marks
were assigned on the basis of performance appraisal and interview.
have heard learned counsel for the parties at length. We are of the view that
the learned single Judge and also the Division Bench of the High Court fell
into patent error in quashing the promotions made by the Bank. The High Court
has failed to appreciate that the NABARD circular dated April 7, 1986 clarified
the earlier circular and specifically provided that "the selection of the
eligible candidates should be based on performance of respective candidates in
the bank". The guidelines are applicable to all the employees of the rural
banks. The High Court fell into patent error in holding that the guidelines
were not applicable to the impugned promotions. We are of the view that the
cumulative reading of the two guidelines issued by the NABARD (quoted above)
clearly shows that the promotions were to be made on the basis of the
comparative assessment of the performance appraisal of the officers concerned.
This has precisely been done by the Director's Committee of the Bank. Even
otherwise the procedure adopted by the Director's Committee was just and fair.
The instructions of the NABARD being in the nature of guidelines the promotions
made by the Bank cannot be set aside unless the same are arbitrary and unfair.
It is settled proposition of law that even while making promotions on the basis
of seniority-cum-merit the totally of the service record of the officer
concerned has to be taken into consideration. The performance appraisal forms
are maintained primarily for the purpose that the same are taken into
consideration when the person concerned is considered for promotion to the
higher rank. The High Court, with respect, was not justified in holding that
the performance appraisal could not taken into consideration by the Director's
Committee while considering the officers for promotion to the higher rank.
allow the appeal, set aside the judgment of the learned single Judge and also
of the Division Bench of the High Court. We uphold the promotions made by the
Bank so far as the appellants and other similarly situated persons are
concerned. The writ petitions filed by the respondents before the High Court
shall stand dismissed. No costs.