AP STATE FINANCIAL CORPORATIONversusC.M. ASHOK RAJ AND ORS.

A                 AP. STATE FINANCIAL CORPORATION
                                  v.
                       C.M. ASHOK RAJ AND ORS.

                                   JULY 12, 1994

B         [KULDIP SINGH AND K. JAYACHANDRA REEDY, JJ.J

            Seivice Law: Promotion-Post of Manager of State Financial Corpora-
    tion-No written test prescribed-Allocation of 25% marks for inten>iew-Not
    exce.'.sivc, arbitrary and against /aH>--Al/ocation of 50':{ marks far peifor-
C   mance appraisal based on confidential repons upheld-c4ssignment of 15%
    marks J;;r length of seivice over a period of five years-Ffrld. Not improper.

          For promotions to the posts of Manager of Ap(Jellant State Financial
    Corporation, the Office Memorandum indicated allotment of 50% for
    performance appraisal, assignment of 15% n1ark3 for seniority and alloca-
D   lion of 25% marks for the interview. Promotions made to the posts were
    challenged on the ground that allotment of 25% marks for interview was
    excessive. The writ petitions were allowed by a Single Judge. On appeal,
    the Division Bench reduced the interview marks from 25% to 15% and
    increased the marks regarding length of service above five years from 15%
    to 25%. Appellant Corporation preferred the present appeals.
E
          AJlowing the appeals, this court

          HELD : 1.1. In the selections/promotions where only viva voce test is
    pnn:;ded, no limit can be imposed in prescribing the marks for the
    inttniew. In the instant case, the High Court was not justified in setting
    aside the allocation of 25% marks for the viva voc,_. test. [478-G, 480-D)

          Anzar Ahmad v. State of Bihar & Ors., JT (1993) 6 SC 168, relied on.

          Ashok Kumar Yadav & Ors. v. State of Haryana & Ors., AIR (1987)
G SC 454, distinguished.
           1.2. The performance having been assessed on the basis of past 3
    )"ears Confidential Reports, no fault can be found with the same. AJlocation
    of 50% marks for performance appraisal based on the confidential reports
    is justified. Finding to the effect that 15% marks for length of service over
H   a period of five years were on the lesser side, is unjustified. No fault can
                                         474
         FINANCIAL CORPN. v. ASHOKRAJ [KULD!P SINGH,!.]                   475

be found with the said allocation. [481-F, H, 482-A]                             A

      Ajay Hasia etc. v. Khalid Mujib Sehrawardi & Ors. etc., AIR (1981) SC
487; Lila D/lar v. State of Rajasthan & Ors., AIR (1981) SC 1777; Ashok @
Soma1111a Gowda & Ors. v. State of Kamataka & Ors., (1991) 2 Scale 796;
R. Chitralekha & Ors. v. State of Mysore & Ors., (1964] 6 SCR 368; A
peeriaparuppan etc. v. State of Tamil Nadu & Ors., (1971] 2 SCR 430; Nishi       B
Maghu etc. v.State ofJ & K& Ors., [1980] 3 SCR1253;Koshal Kumar Gupta
& Ors. v. State of J & K & Ors., (1984] 3 SCR 407; Munindra Kumar v. Rajiv
Govil, [1991] 3 SCC 368; State of U.P. etc. v. Rajiquiddin & Ors. etc., [1988]
I SCR 794 and Mehmood Alam Tariq & Ors. etc. v. State of Rajasthan &
Ors. etc. (1938] Supp. I SCR 379, referred to.                                   C

      CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5503-
5514 of 1993.

      From the Judgment and Order dated 24.4.92 of the Andhra Pradesh
High Court in W.A.M.P. Nos. 2048, 2056, 2047, 2052, 2045, 2051, 2042,            D
2046, 2040, 2050 and W.P.M.P. Nos. 18366, 18447 of 1991.

      K. Srinivasa Murthy and Y.P. Rao for the Appellant.

      K. Venugopal Reddy, V.V.S. Rao, K. Ram Kumar and Ms. Anjani
for the Respondent.                                                              E
     C.S.S. Rao, A.T.M. Sampath and Ms. Pushpa Rajan for R. 1 and
impleaded resp!. 78-85.

      The Judgment of the Court was delivered by
                                                                                 F
      KULDIP SINGH, J. The Board of Directors (the Board} of tk
Andhra Pradesh State Financial Corporation (the Corporation), on Auge ;t
24, 1987, approved the promotion criteria in respect of various posts )n tf1c
service of the Corporation. Thereafter. Office Memorandum dateJ Sep-
tember 1, 1987 containing the said criteria was issued. In these appeals, we G
are concerned with the promotions made to the posts of Manager and
above. The Office Memorandum indicated the following criteria for
promotion to the post of Manager and above :-

        "1. A minimum service of 3 years is required to become eligible
        for promotion to the next higher cadre.                                  H
    476                    SUPREME COliRT REPORTS (1994] SUPP.1 S.C.R.

A           2. The weightages attached to various criteria for considering merit
            promotions to various cadre personnel is as follows:

            Additional qualificatons               10%

            Length of service in the cadre         15%
B
            3 to 4 years                        71114%

            4 to 5 years                       10/1/4%

            5 years and above                      15%
c           Performance appraisal                  50%

            Interview                              25%

          Regarding the performance apprais.J, having weightage of 50%
D marks, the Board, in its meeting dated AugJst 24, 1987 resolved a.sunder:-
            "FURTHER RESOLVED THAT THE exiting Confidential
            Reports shall be continued upto the level of AsstL Manag~rs. For
            Deputy Managers and above, performance appraisal based on
            self-appraisal reports in the format indicated in the Memorandum
E           shall be introduced prospectively.

            FURTHER RESOLVED that at the time of considering promo-
            tions, the performance/Confidential Reports of the preceding 3
            years should be taken into account.
F         Performance appraisal was . included as one of the criterion for
    promotion by the Board for the first time. The Confidential Reports are
    based on the asseosment of a single superior officer whereas the method
    of performance appraisal is based on the self-appraisal by the officer
                                                  .                       '
    concerned. It is a method where the employee is asked to give, in his own
G   words, his strong points, weak points and constraints faced by him in the
    service. The self-appraisal is then considered by the reporting officer who
    gives his remarks. Finally the higher reviewing authority decides the assess·
    ment by weighing both the employee's self-appraisal and the remarks given
    by the reporting officer. According to the Board, the method of perfor-
H   mance appraisal based on self-appraisal was an improvement on the
        . FlNANCIAL CORPN, v. ASHOK RAJ [KULDIP SINGH, J.J              477

 method of assessment by Confidential Reports. Keeping in view the pro- A
 cedure involved in the performance appraisal system the Board in its
 resolution, quoted above, decided to introduce the said system prospec-
 tively. For the selection in hand it was decided to assess the performance
 on the basis of Confidential Reports for the preceding three years.
                                                                              B
        Promotions made to the posts of Manager and above by the orders
dated January 7, 1988 and February 1, 1988 were challenged by way of writ
 petitions before the Andhra Pradesh High Court by those who were not
selected. A learned single Judge of the High Court came to the conclusion
that the allotment of 50% marks to performance appraisal under the new
promotion policy was on the higher side, assigning 15% marks for seniority C
to a person who has served for five years and above was palpable low and
allocating 25% marks for the interview was on the higher side. On these
findings, the learned single Judge allowed the writ petitions and quashed
the selection and the appointments made by the Board. Writ appeals filed
by the Corporation were heard by a Division Bench of the High Court and D
Lakshmana Rao, J. speaking for the Bench upheld the findings of the
learned single Judge to the effect that 25% marks for interview were
excessive. The Bench, however, did not agree with the learned Single Judge
that 50% marks for performance appraisal were excessive. The Division
Bench reduced the interivew marks from 25% to 15% and increased the E
marks, regarding length of service above 5 years, from 15% to 25%. With
these modifications, the Division Bench dismissed the writ appeals. The
Corporation filed special leave petitions against the judgment of the
Division Bench which were rejected by this Court on October 4, 1991 by
the following order:-
                                                                              F
        "The Special Leave Petitions are rejected as withdrawn with liberty
        to the petitioner to approach the High Court, if it is so advised,
        to point out the case which has since been pleaded before us."

      Thereafter, the Corporation, in terms of the liberty granted by this G
Court, approached the High Court by way of miscellaneous petitions
requesting the High Court to consider the matter afresh in the light of
various points raised in the petitions. The High Court by the order dated
April 24, 1992 dismissed the petitions. These appeals by way of special
leave are against the judgment of the Division Bench of the High Court in H
    478                   SUPREME COURT REPORTS [1994] SUPP. 1 S.C.R.

A   the writ appeals, order dismissing the review petitions and the order
    dismissing the petitions which were filed in terms of the libercy granted by
    this Court.

         Learned counsel for the contesting respondents have strenuously
  contended that the special leave petitions against the judgment of the
B Division Bench of the High Court in writ appeals, having been rejected by
  this Court, the High Court judgment has achieved finality and, as such,
  these appeals are liable to tbe dismissed on that short ground. We do not
  agree with the learned counsel. This Court while rejecting the petitions as
  withdrawn, granted liberty to the petitioner to approach the High Court
C and point out the case which was sought to be pleaded before this Court.
  In other words, this Court prima facie found the contentions of the
  petitioner to be plausible and, as such, granted liberty to raise the same
  before the High Court. The High Court heard the parties at length and
  passed a reasoned order running into sixteen pages. In the facts and
D circumstances of this case, we are not inclined to agree with the learned
  counsel that the judgment of the High Court in writ appeals has achieved
  finality.

            The Division Bench of the High Court relied upon the judgments of
E   this Court in Ajay Hasia etc. v. Khalid Mujib Sehravardi & Ors. etc., AIR
    (1981) SC 487, Lila Dharv. State of Rajasthan & Ors., AIR (1981) SC 17771
    Ashok Kumar Yadav & Ors. v. State of Haryana & Anr., AIR (1987) SC 454,
    and Ashok alias Somanna. Gowda & Anr. v. State of Kamataka & Ors.,
    (1991) 2 Scale 796, and came to the conclusion that allocation of 25%
    marks for interview was arbitrary and against law. We are of the view that
F   the High Court fell into patent error in reaching the conclusion that 25%
    marks for interview, in the facts of the present case, were excessive. It is
    not disputed that no written test was prescribed for promotion to the post
     of Manager and above. This Court has authoritatively laid down that the
    ratio in Ashok Kumar Yadav's case (supra) and other cases in line, is only
G    applicable to those selections where written examination in addition to viva
    voce test is prescribed. In the selections/promotions where only viva yoce
     test is provided, no limit can be imposed in prescribing the marks for the
     interview. This Court inAnzar Ahmad v. State of Bihar & Ors., JT (1993)
     6 SC 168, considered the selection made .for the posts of Unani Medical
H    Officer where 50% marks were. allocated for interview. The question
        FINANCIAL CORPN. v. ASHOKRAJ [KULDIP SINGH, J.]                 !'.·;


raised before this Court in Anzar Ahmad's case (supra) was whether the A
law laid down by this Court regarding fixation of marks for interview in a
selection based on written test and viva-voce would apply to a case where
there is no written test and the selection is made on the basis of academic
performance and interview. The question was answered in the negative
and allocation of 50% marks for viva voce test was upheld. While doing B
s<J, the earlier decisions of this Court in R. Chitralekha & Anr. v. State of
Mysore & .Ors., [1964) 6 SCR 368, A. Peeriakaruppan Etc. v. State of Tamil
Nadu & Ors., [1971) 2 SCR 430, Nishi Maghu etc. v. State of !ammu &
Kashmir and Ors., [1980) 3 SCR 1253, Ajay Hasia etc. v. Khalid Mujib
Sehravardi & Ors. etc., [1981) 2 SCR 79, and Kosha/ Kumar Gupta & Ors., . C
v. State of !ammu & Kashmir and Ors., [1984) 3 SCR 407, Lila Dhar v. State
of Rajasthan & Ors., [1982) 1 SCR 320, Ashok Kumar Yadav & Ors. etc.etc.,
v. State of Haryana & Ors. etc.etc., [1985) Supp. 1 SCR 657, Munindra
Kumar v. Rajiv Govil [1991) 3 SCC 368, State of U.P. etc. v. Rafiquiddin &
Ors. etc., [1988) 1 SCR 794, and Mehmood Alam Tariq & Ors. etc., v. State
of Rajasthan & Ors. etc., [1988) Supp. 1 SCR 379, were taken into D
consideration. We may qoute the following passage from the judgment:-

        "These observations would indicate that the matter of weight to
        be attached to interview and the allocation of marks for interview
        vis-a-vis marks for written examination can arise when written          E
        examination as well as viva voce test are both accepted as essential
        foatures of proper selection and there als" no hard and fast rule
        regarding the precise weight to service ac:cording to the require·
        ment of Service. The question of weight to be attached to viv.a
        voce would not arise where the selection is to be made on the basis     F
        of interview only."

    This Court in Anzar Ahmad's case (supra) referred to Ashok alias
Somanna Gowda's (supra) and explained the same in the following words: -

        "In that case selection was made for the post of Assistant Engineer G
        (Civil) and (Mech.) for the Public Works Department and the said
        selection was made on the basis of the marks obtained in the
        qualifying examination and the marks secured in the interview. 100
        marks were allocated for qualifying examination and 50 marks for
        interview. Relying on the decisions in Mohinder Sain Garg's case H
         480                  SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.

A-   .           (supra) and Ashok Kumar Yadav's case (supra) this Court held
                 that allocation of 50 marks for interview was high and only 15
                 percent of total marks be allocated for interview. In that case,
                 however, this Court did not quash the selection that had been made
                 and did not quash the rules on the basis of which the impugned
B                selection had been made but only directed that the appellants be ·
                 appointed in case they were found suitable in all other respects
                 according to the rules .. The said decision appears to have been
                 given in the particular facts of that case and it cannot be said to .
                 have laid down a·law different from that laid down in the earlier
c                 decisions of this Court referred to above. We are unable to con-
                  strue the said decision to mean that principles which govern the
                  allocation of marks for-interview in a selection based on written
                  and viva voce test would also apply to a selection where no written
                  test is held and the selection is hosed on interview only."

D              We respectfully agree with the ratio inAnzar Ahmed's case and hold
         that the High Court was not justified in setting aside the allocation of 25%
         marks for the viva voce test.

               The Division Bench of the High Court referred to Cir'cular No. 56
E        dated September 22, 1987 and came to the conclusion that the format
         provided for performance appraisal in terms of the Board's resolution
         dated (August 24, 1987) was entirely different than the one provided under
         circular No.56. On that reasoning, the Division Bench reached the follow-
         ing conclusion:-
F
                  "Thus, it is evident that the Corporation had adopted a procedure
                  different from the one accepted by the Board of Directors in
                  promoting the employees to the categories of Manager and above.
                  This is wholly illegal and improper."

G               The High Court fell into patent error in reaching the above quoted
          conclusion. As mentioned above, the Board, in the resolution dated
          August 24, 1987 had resolved that the method of performance appraisal
          based on self-appraisal was to operate prospectively. The High Court
          failed to appreciate that for the selection in hand the Merit-Assessment
H         could only be done on the basis of confidential reports for the past years.
        FINANCIAL CORPN. v. ASHOKRAJ [KULDIP SINGH, J.]                 481

The performance-appraisal system was introduced on August 24,1987 and A
it was to operate thereafter. The resolution of the Board categorically
stated that the performance 'iiPPraisal system is prospective and so far as
the selection in hand was concerned; it was to be done on the basis of the
past Confidential Reports for the period of three years. The Corporation
in the special leave petition categorically averred as under:-              B

        "It is submitted even though as per the resolution of the Board,
        self-appraisal procedure has to be followed only for future and in
        fact in cannot be followed for the promotions which were effected
        in January/February, 1988 as there was no scope for any one to C
        file self-appraisal report or for the reporting authorities or review-
        ing authorities to process the same and that too for three years,
        the only course open was to consider the Coiifidential Reports .and
        in fact only Confidential Reports were considered by DPC and
        that is the reason why even in the marking system in column No.5 D
        what was mentioned was self-appraisal report/Confidential
        Reports. However, the learned Judge ptoceeded on the wrong
        impression that it was self-appraisal report which was considered
        and he felt that was not correct, when in fact self-appraisal report
        was not considered at all. It may also be noticed that DPC             E
        awarded marks only for Confidential Reports and not for self-ap-
        praisal reports."


       The performance having been assessed on the basis of past 3 years
Confidential Reports, no fault can be found with the same. There is nothing F
on the record to contradict the categorical stand of the Corporation that
no other ;naterial except the Confidential Reports were taken into con~
sideration for awarding marks. Circular No.56 dated September 22, 1987
gave an opportunity to the candidates to give self-explanation of any
adverse material in their Confidential Reports for the past three years. G
That was not taken into consideration for awarding the marks. As men-
tioned above, the marks were directly awarded on the basis of the Con-
fidential Reports. We, therefore, do not agree with the .Division Bench of
the High Court and set aside its above quoted finding on this point. We,
however, uphold the allocation of 50% marks for performance appraisal
based on the confidential reports.                                          H
    482                  SUPREME COURT REPORTS [1994) SUPP. 1 S.C.R.

A         The finding of the learned single Judge as upheld by the Division
    hen ch to I he effect that 15% marks for length of service over a period of
    liw year. were on the lesser side, is based on no reasoning and is wholly
    tm!L,stificd. No fault can be found \\ith the said allocation.

           We allow the appeals, set ""de the judgment of the Division Bench
B   of the High Court in writ appeals, order in review petitions and the order
    in the miscellaneous petitions. As a consequence, the writ petitions filed
    by the contesting respondents before the High Court are dismissed. No
    costs.

    A.G.                                                     Appeals allowed.