Kumar Srivastava & Ors. Vs. Samyut Kshetriya Gramin Bank & Ors. 
INSC 1739 (17 November 2009)
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.6691 OF
2001 Rajendra Kumar Srivastava & Ors. ... Appellants v. Samyut Kshetriya
Gramin Bank & Ors. ... Respondents
The appellants are employees of the first respondent Bank, having
been appointed between 1979 and 1982. By notification dated 28.9.1988, the
Central Government in exercise of powers conferred under section 17 read with
section 29 of the Provincial Rural Banks Act, 1976 framed the "Regional
Rural Banks (Appointment and Promotion of Officers and Other Employees) Rules,
1988 (`Rules' for short). Rule 5 of the Rules provided that all vacancies
should be filled up by deputation, promotion or direct recruitment, in
accordance with provisions contained in the Second Schedule to the Rules. Entry
7 in the Second Schedule related to recruitment to the posts of Area Manager or
Senior Manager (in Scale II).
provided that all the posts of Area Managers and Senior Managers should be
filled by promotion from among the confirmed officers (in Scale I) working in
the bank on the basis of seniority-cum-merit. It prescribed the educational
qualification (graduate) and minimum period of service in the feeder cadre
(eight years as an officer in the concerned regional rural bank). It also
prescribed the mode of selection by promotion as "Interview and assessment
of performance reports for the preceding three years period as officers".
Sub-Rule (4) of Rule 10 provided that the Staff Selection Committee shall
follow the procedure determined by the Board for selecting candidates for
appointment or promotion, in accordance with the guidelines issued by the
Central Government from time to time.
At the 131st meeting of the Board of Directors of the first
respondent bank held on 29.11.1996, the following procedure for promotion of
officers from scale I to scale II was approved :
considering the guidelines contained in the Government of India's letter dated
23rd September, 1988 and the Letter no. 823 dated 7th October, 1996 of the
National Bank, the Board passed a resolution that 60 points be earmarked on the
basis of work done during the previous three years in the Selection procedure
for promotion on the Scale II posts and 40 points be given for interview and in
this manner the promotion procedure should be completed.
information in this behalf be given to the National Bank."
pursuance of the above, the eligible candidates (officers Scale I), including
appellants were considered and interviewed on 16.12.1996 and 17.12.1996 and a
select list was published on 20.12.1996 promoting 64 officers (respondents 4 to
67) from scale I to scale II with effect from 20.12.1996.
Appellants 1 to 7 were not selected. Many who were selected, were
their juniors. The appellants allege that their service and conduct were good
and there were no adverse entries against them and therefore, they ought to
have been promoted from Officer scale I to scale II. They therefore filed a
writ petition before the Allahabad High Court (WP No.3151/1997), for quashing
the entire promotion process of the first respondent bank from scale I to scale
II culminating in the order dated 20.12.1996 and for a direction to the first
respondent bank to undertake the promotion process afresh. The appellants also
sought quashing of the resolution of the Board of Directors dated 29.11.1996
prescribing the promotion procedure.
The respondent bank resisted the said petition by filing a counter
defending the promotions. During arguments, the High Court secured the original
records from the bank to ascertain the procedure followed by the 4 bank in the
selection. The High Court also directed that the relevant documents be brought
on record. Accordingly, the relevant documents were filed by the Bank with an
additional affidavit, wherein the Bank described the selection procedure
followed by it, as follows :
when the proposal for promotion came before the Board, the department of
personnel under the direction of the Chairman prepared complete summary giving
the past history and the proposals for selection procedure. A thick booklet was
prepared and in chapter V of the same the details for the procedure for
selection were given. This book was part of the agenda put before the Board of
Directors in its meeting of 23.9.1996 in which the process was approved with
certain modification. A copy of the proceedings of the Board meeting is
Annexure A to this affidavit.
whole matter has to be again presented before the Board in its meeting dt.
29.11.96, as in the meantime a letter was received from NABARD giving certain
directions. The Board in this meeting adopted the process given in chapter V
with certain modifications in the process as desired in the letter of the
NABARD dated 7.10.1996 is Annexure B to this affidavit and a copy of the NABARD
letter dated 7.10.1996 is Annexure C to this affidavit.
Chapter V of the Booklet which has been approved by the Board with
modifications is also being filed as Annexure D to this affidavit.
the end of chapter V it is provided that the qualifying marks will be 78% and
those who will secure 78% or above would be eligible for promotion.
selection Committee put these marks obtained on the seniority list and
according to seniority those who were found eligible they have been promoted.
This was done in accordance with the principle of seniority cum merit. As such
there is nothing wrong in following this procedure.
of those petitioners could secure 78% marks and hence they were not
High Court, after considering the material made available and respective
contentions, passed the impugned order dated 4.7.2001, whereby it upheld the
process of selection. It held that the two stage process adopted by the bank -
the first preparing a list of candidates who secured the minimum of 78 marks
(aggregate) in the performance appraisal and interview, and the second
promoting the candidates who secured the minimum marks, strictly on the basis
of seniority - satisfied the seniority-cum-merit criteria for promotion. The
said decision is challenged in this appeal by special leave.
It is contended by the appellants that the concept of promotion by
seniority-cum-merit, did not contemplate prescribing of minimum qualifying
marks for assessment of performance/interview, before applying the principle of
seniority for promotion. It is contended that restricting the promotion to only
those who secured the minimum qualifying marks, was violative of the
seniority-cum-merit principle. It is further contended that even if any
qualifying marks could be prescribed for assessing the minimum necessary merit required
to meet the efficiency of administration, the fixation of an extremely high
mark of 78 out of 100 as qualifying marks, had the effect of converting the
criteria of 6 promotion from seniority-cum-merit to merit-cum-seniority. The
appellants placed strong reliance on the decisions of this Court in B.V. Sivaiah
v. K. Addanki Babu [1998 (6) SCC 720] and Bhagwandas Tiwari v. Dewas Shajapur
Kshetriya Gramin Bank [2006 (12) SCC 574] in support of their contentions.
On the contentions urged, the following two questions arise for
our consideration :
Whether minimum qualifying marks could be prescribed for assessment of past
performance and interview, where the promotions are to be made on the principle
of seniority-cum-merit? (ii) Whether the first respondent bank was justified in
fixing a high percentage (78%) as the minimum qualifying marks (minimum merit)
for promotion? Re : Question (i)
In State of Kerala vs. N. M. Thomas - 1976 (6) SCC 310, a seven-
Judge Bench of this Court defined the concept of `seniority-cum-merit'.
Court held that "seniority-cum-merit" means that given the minimum
necessary merit requisite for efficiency of administration, the senior though
the less meritorious shall have priority." In Union of India vs. Lt. Gen.
Rajendra Singh Kadyan - 2000 (6) SCC 698, this Court 7 observed that
"seniority-cum-merit" postulates the requirement of certain minimum
merit or satisfying a benchmark previously fixed, and subject to fulfilling the
said requirement, the promotion is based on seniority. It was pointed out that
requirement of assessment of comparative merit was absent in the case of
It is also well settled that the principle of seniority-cum-merit,
for promotion, is different from the principle of `seniority' and principle of
`merit-cum-seniority'. Where promotion is on the basis of seniority alone,
merit will not play any part at all. But where promotion is on the principle of
seniority-cum-merit, promotion is not automatic with reference to seniority
alone. Merit will also play a significant role. The standard method of
seniority-cum-merit is to subject all the eligible candidates in the feeder
grade (possessing the prescribed educational qualification and period of
service) to a process of assessment of a specified minimum necessary merit and
then promote the candidates who are found to possess the minimum necessary
merit strictly in the order of seniority.
minimum merit necessary for the post may be assessed either by subjecting the
candidates to a written examination or an interview or by assessment of their
work performance during the previous 8 years, or by a combination of either two
or all the three of the aforesaid methods. There is no hard and fast rule as to
how the minimum merit is to be ascertained. So long as the ultimate promotions
are based on seniority, any process for ascertaining the minimum necessary
merit, as a basic requirement, will not militate against the principle of
In Sivaiah (supra), a three-Judge bench of this Court held that
while the principle of seniority-cum-merit laid greater emphasis on seniority,
the principle of merit-cum-seniority laid greater emphasis on merit and
ability, with seniority playing a less significant role. This Court held :
thus arrive at the conclusion that the criteria of "seniority-cum-
merit" in the matter of promotion postulates that given the minimum
necessary merit requisite for efficiency of administration, the senior, even
though less meritorious, shall have priority and a comparative assessment of
merit is not required to be made. For assessing the minimum necessary merit,
the competent authority can lay down the minimum standard that is required and
also prescribe the mode of assessment of merit of the employee who is eligible
for consideration for promotion. Such assessment can be made by assigning marks
on the basis of appraisal of performance on the basis of service record and
interview and prescribing the minimum marks which would entitle a person to be
promoted on the basis of seniority-cum-merit."
Thus it is clear that a process whereby eligible candidates
possessing the minimum necessary merit in the feeder posts is first ascertained
and thereafter, promotions are made strictly in accordance with seniority, from
among those who possess the minimum necessary merit is recognised and accepted
as complying with the principle of `seniority-cum-merit'. What would offend the
rule of seniority-cum-merit is a process where after assessing the minimum
necessary merit, promotions are made on the basis of merit (instead of
seniority) from among the candidates possessing the minimum necessary merit. If
the criteria adopted for assessment of minimum necessary merit is bona fide and
not unreasonable, it is not open to challenge, as being opposed to the
principle of seniority-cum-merit. We accordingly hold that prescribing minimum
qualifying marks to ascertain the minimum merit necessary for discharging the
functions of the higher post, is not violative of the concept of promotion by
The next question is whether fixing of 78% as minimum qualifying
marks (that is as the minimum necessary merit) is unreasonable and arbitrary.
The Rules in this case provide that the mode of selection is by 10 interview
and assessment of performance reports for the preceding three years as officer
Scale I. The seniority list of officers in scale I was published on 4.12.1996.
Thereafter, the promotion process was held by earmarking 60 marks for
assessment of performance Reports (at the rate of 20 marks per year) and 40
marks were allotted for interview. The officers possessing the minimum
qualifying marks of 78%, were then promoted on the basis of seniority. What
should be the minimum necessary merit for promotion, is a matter that is
decided by the management, having in mind the requirements of the post to which
promotions are to be made. The employer has the discretion to fix different
minimum merit, for different categories of posts, subject to the relevant
Rules. For example, for promotions at lower levels, it may fix a lesser minimum
qualifying marks and fix a comparatively higher minimum qualifying marks for
higher posts. In the first respondent Bank, the post of officer-Grade II (Area
Managers and Senior Managers) is a very senior position, next only to the top
post of General Manager. As the officers promoted to Scale II were required to
head larger branches or departments in the Head Office, shouldering higher
responsibilities and virtually competing with commercial banks, it cannot be
said that the fixing the minimum qualifying marks at 78% is excessive,
unreasonable 11 or arbitrary. We may refer to the following observations of
this Court in K. Samantaray vs. National Insurance Col. Ltd. - AIR 2003 SCC
4422, in this context :
is for the employer to stipulate the criteria for promotion, the same
pertaining really to the area of policy-making. It was, therefore, permissible
for the respondent to have their own criteria for adjudging claims on the
principle of seniority-cum-merit giving primacy to merit as well, depending
upon the class, category and nature of posts in the hierarchy of administration
and the requirements of efficiency for such posts."
Another aspect requires to be noticed. Where the assessment of
minimum merit is with reference to previous performance record (Annual
Confidential Records) and/or by interview, as contrasted from a written
examination, prescription of 78% as minimum, will not be considered as
In Sivaih (supra), this Court held that prescribing a minimum of
50 marks out of 100 for interview was not violative of the principle of
seniority. This Court held :
the course of hearing of the appeal, the learned counsel for the
respondent-Bank has placed before us the relevant documents relating to the
impugned selection and promotion. On a perusal of the said documents, we find
that 50 marks out of the total of 100 marks were prescribed as the minimum
qualifying marks for interview and only those who had obtained the qualifying
marks in interview were selected for promotion on the basis of seniority. It 12
was, therefore, a case where a minimum standard was prescribed for assessing
the merit of the candidates and those who fulfilled the said minimum standard were
selected for promotion on the basis of seniority. In the circumstances, it
cannot be said that the selection has not been made in accordance with the
principle of "seniority- cum-merit."
the guidelines/rules adopted for assessing the minimum necessary merit by
prescribing marks under several heads or by prescribing a specific minimum
mark, is reasonable or arbitrary, would depend upon the facts of each case. If
it is demonstrated that the minimum marks were fixed with the intention of
favouring someone or to specifically exclude someone, the courts may interfere.
Similarly, where the minimum marks are shown to have been fixed to defeat or
nullify the mode of seniority-cum-merit for promotion, there may be a cause for
interference. In other cases, there is very little scope to interfere with the
procedure adopted to ascertain the minimum required merit.
In Bhagwandas Tiwari (supra), this Court reiterated the principle
laid down in Sivaiah (supra) and State of UP vs. Jalal Uddin (2005 (1) SCC 169]
that principles of seniority-cum-merit and merit-cum-seniority are conceptually
different and that in seniority-cum-merit greater emphasis is on seniority
though it may not be the only determinative 13 factor. It then held on the
facts of that case, that the method adopted therein fixing 75% as minimum
marks, violated the principle of seniority- cum-merit. Reliance is placed by
the appellants on the following observations of this Court:
contention that minimum marks were 45 out of 60, means that an employee is to
secure 75% of marks. Such a high percentage cannot be a measure for prescribing
minimum marks to assess merit.
obviously would be a case of shifting the focus to merit-cum- seniority
principle. It obviously would be a case of shifting the focus to
merit-cum-seniority principle. In para 37 of Sivaiah case, this Court noted
that minimum marks prescribed for assessing merit do not depart from the
seniority-cum-merit principle. But the factual position is different here.
There is no mention that 45 marks out of 60 relate to the prescription of
minimum marks for assessing the merit."
appellants contend that the Rules considered in Bhagwandas Tiwari and in this
case are the same and therefore, the effect of the decision in Bhagwandas Tiwari
is that wherever minimum qualifying marks is fixed as 75% or more, the
seniority-cum-merit rule would be violated.
We have carefully examined the decision in Bhagwandas Tiwari.
the Rules applicable and mode of selection prescribed ("interview and
assessment of performance for the preceding three years period as officers for
promotion") are the same in both cases, the criteria and standards adopted
for assessing the minimum necessary merit are 14 completely different. We
extract below the standards adopted for promotion in this case and in
Bhagwandas Tiwari :
adopted in this case Marks allotted (i) Work performance during the previous
years 60 (ii) Interview 40 -------------- Total 100 ========= The minimum marks
for eligibility for promotion : 78%.
adopted in the case of Bhagwandas :
performance during the previous 3 years 30 (b) Period of service (at the rate
of 2 marks per year 40 For competed period of service subject to a Maximum of
40) (c) Interview 30 -------------- Total 100 ======== In order be selected for
promotion, obtaining 45 marks shall be compulsory"
thus be seen that the schemes for assessing minimum necessary marks are
completely different in the two cases. While work performance carried only 30
marks in Bhagwandas's case, it carried 60 marks in this case. While period of
service carried 40 marks in Bhagwandas's case, no marks are provided for
`period of service' in this case. While the marks for interview were 30 in
Bhagwandas's case, it is 40 in this case. The 15 minimum qualifying marks were
78 out of 100 in this case. In Bhagwandas, the minimum qualifying marks
prescribed was 45 marks out of 100. But ignoring the requirement of 45 out of
100, the selection Committee adopted a minimum of 45 out of 60 (that is
aggregate of marks for work performance and Interview only) ignoring the marks
of 40 for period of service though that was the highest segment. This Court was
persuaded to interfere in that case, as the guidelines which prescribed the
minimum qualifying marks as 45 out of 100 was ignored and the committee changed
the minimum qualifying marks to 45 out of 60, thereby ignoring the marks
secured for the period of service. Thus, the decision in Bhagwandas Tiwari will
not assist the appellants.
We therefore find no merit in this appeal and it is accordingly
...........................J. (R V Raveendran)