Supreme Court of India
SARVA U.P. GRAMIN BANK & ORS.versusMANOJ KUMAR CHAK
- Citation
- 2013 INSC 226
- Decided
- 9 April 2013
- Disposal
- Dismissed
- Bench
- S S NIJJAR
Holding
Statutory service rules cannot be supplanted by circulars; the circulars that debar employees with a ‘D’ rating or disciplinary punishment from promotion are ultra vires and must be set aside.
Summary
The Supreme Court considered appeals by several Regional Rural Banks challenging a High Court order that set aside two bank circulars which barred employees who had received a Grade ‘D’ performance rating or disciplinary punishment in the preceding five years from being considered for promotion. The Court examined the statutory framework under the Regional Rural Banks Act, 1976 and the RRB (Appointment and Promotion of Officers and other Employees) Rules, 1998, which prescribe promotion on a seniority‑cum‑merit basis. It held that while statutory rules may be supplemented, they cannot be supplanted; the circulars effectively overrode the eligibility criteria in the Rules and were therefore ultra vires. The Court clarified that punishment and adverse appraisals may be considered by the Departmental Promotion Committee when assessing merit, but cannot be used to disqualify an employee from the zone of consideration absent a specific rule. Consequently, the circulars were rightly quashed and the banks' appeals were dismissed.
Issues considered
- Whether the circulars that exclude employees with a ‘D’ rating or disciplinary action from promotion are permissible under the RRB Rules, 1998.
- Whether statutory service rules can be supplemented or must not be supplanted by administrative circulars.
- Whether punishment or adverse performance appraisal can render an employee ineligible for promotion under the seniority‑cum‑merit principle.
- Whether the determination of bare minimum merit is within the exclusive domain of the Departmental Promotion Committee.
Legislation cited
- Regional Rural Banks Act, 1976s. 17, s. 29
Subjects
promotionseniority‑cum‑meritdepartmental punishmentcircularsstatutory ruleseligibilityDepartmental Promotion Committeeservice lawRRB
Judgment
[2013] 2 S.C.R. 562
A SARVA U.P. GRAMIN BANK & ORS.
v.
MANOJ KUMAR CHAK
(Civil Appeal Nos. 2970-2975 of 2013 etc.)
APRIL 09, 2013.
B
[SURINDER SINGH NIJJAR AND H.L. GOKHALE, JJ.]
REGIONAL RURAL BANKS (APPOINTMENT AND
PROMOTION OF OFFICERS AND OTHER EMPLOYEES)
C RULES, 1998:
"· 2(d), (e), (f) and (j) - Promotions to be made· "on the
basis of seniority-cum-merit" - Connotation of - Circulars dated
30.11.2009 and 12.7.2010, enabling the management to
eliminate from zone of consideration such employees who
0 have been rated Grade 'D' in perfonnance appraisal or who
have suffered punishment - Set aside by High Court - Held: .
Rules do not provide the criteria introduced by the two-
circulars - The procedure prescribed under the two circulars
clearly has the effect of supplanting the provision of eligibility,
E which is not permissible - Determination of the bare minimum
criteria is the function of the DPC and cannot be taken-over
by management - Misconduct committed by employee/officer
would be a matter for DPC to take into consideration at the
time of performance appraisal - The two circulars being
F contrary to statutory Rules, have rightly been quashed by High
Court - Circular No. 17 of 2009 dated 3Q;11.2009 - Circular
dated 12. 7. 201 O - Service law - Promotion - Regional Rural
Banks (Appointment and Promotion of Officers and other
Employees) Rules, 1988.
G
The instant appeals were filed by the appellant-Banks
challenging the judgment passed by the High Court,
whereby it set aside the Circular No. 17 of 2009 dated
30.11.2009 and Circular dated 12.7.2010 in so far as they
H 562
SARVA. U.P. GRAMIN BANK & ORS. v. MANOJ 563
KUMAR CHAK
provide to exclude the employees from consideration for A
promotion on the basis that they had either obtained the
'D' rating in the annual performance report or were
penalized for any misconduct in the preceding 5 years.
Dismissing the appeals, the Court B
HELD: 1.1 Statutory rules can be supplemented but
cannot be supplanted. The RRB Rules, 1988 clearly
provided that promotion shall be made by following the
criteria of seniority-cum-merit There was no provision in
the 1988 Rules that an employee/officer, who has been C
punished in the 5 years preceding the selection process
or has been given an adverse remark or graded 'D' shall
not be considered for promotion at all. The circular dated
1.12.1987, which talks of promotion with seniority with
due consideration to minimum merit/fitness, being clearly D
contrary to 1988 Rules ceased to have any legal effect on
: enforcement of the said Rules. The RRB Rules, 1988 were
superseded by the RRB Rules, 1998, which incorporated
the principle of minimum merit as enunciated by this
Court in B.V. Sivaiah. Following the observations of this E
Court, the RRB Rules, 1998 have introduced a detailed
procedure for determining the minimum merit for
promotion to the next higher post/grade. The RRB Rules,
1998 clearly provided that officers holding post for 8
years as an officer on regular basis in the RRB shall be F
considered for promotion to the next higher post. The
said Rules do not provide that any employee/officer, who
has suffered a punishment or has received an adverse
appraisal/Grade 'D' in the performance appraisal, shall not
be eligible. However, the Circulars dated 30.11.2009 and G
12.7.2010 enable the appellant banks to eliminate such
employees, which is clearly contrary to the provisions
contained in the statutory service rules. The procedure
prescribed under the aforesaid two Circulars clearly has
the effect of supplanting the provision of eligibility, which H
564 SUPREME COURT REPORTS [2013) 2 S.C.R.
A is not permissible. Such an additional provision can not
be justified on the basis that it would form part of the
minimum merit required to be considered for promotion.
[para 27-32] [583-E-G; 584-B-C-E; 585-B-E]
8 Sant Ram Sharma Vs. State of Rajasthan & Ors. (1968)
1 SCR 111 - relied on.
B. V. Sivaiah & Ors. Vs. K. Addanki Babu & Ors. 1998
(3) SCR 782 = 1998 (6) SCC 720 - referred to.
c Rajendra Kumar Srivastava & Ors. Vs. Samyut Kshetriya
=
Gramin Bank & Ors. 2009 (15) SCR 936 2010 (1) SCC 335
- held inapplicable.
1.2 It can not be said that bare minimum merit can be
determined even before the list of candidates is placed
D before the DPC for consideration of their merit. It is only
when all the candidates within the zone of consideration
have participated in the selection procedure and their-
performance is assessed on the basis of written test,
interview, and past performance i.e. performance
E appraisal, that the minimum merit would become relevant
When the bare minimum merit of the candidates is
determined, the promotion shall be made on the basis of
seniority irrespective of the better performance of the
junior candidates in the written test/interview/
F performance appraisal. [para 33] (586-E, G-H; 587-A]
Union of India & Ors. Vs. K. V. Jankiraman & Ors. 1991
(3) SCR 790 =1991 (4) SCC 109- held inapplicable.
2.1 In Jankiraman's case, it has been held that
G promotion can be justifiably denied to eligible candidate
at the time of his/her performance appraisal by the DPC.
The fact that the officer/employee has been
departmentally punished would form part of the service
record and can be taken into account by the DPC. In such
H
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 565
KUMAR CHAK
circumstances, the employee cannot possibly claim to A
have been subjected to a further penalty on the basis of
the misconduct which led to his punishment. This,
however, would not permit the management to debar an
employee from being considered for promotion at the
stage of considering whether such an employee is 8
"eligible" to be considered in terms of r. 2(e). [para 34)
(587-B; 588-F-H]
2.2 Determination of the bare minimum criteria is the
function of the DPC and cannot be taken-over by the
management at the time of determining the eligibility of a C
candidate under r. 2(e). There is, in fact, a complete
segregation of r.2 (e) from r. 2(f). Determining the eligibility
of candidate is in the nature of a ministerial function. The
management merely has to see that the candidate
possesses the minimum length of service and that he/she D
is confirmed in the feeder cadre. The determination of
bare minimum merit is on the basis of the performance
in the written test/interview and performance appraisal.
This is the function of the Selection Committee i.e.
Departmental Promotion Committee. [para 35 and 37) E
(589-F-G; 590-E-F]
Ram Ashish Dixit Vs. Chairman, Purvanchal Gramin
Bank & Ors. 2013(6) SCALE 345 - held inapplicable.
2.3 There is no doubt that punishment and adverse F
service record are relevant to determine the minimum
merit by the DPC. But to debar a candidate, to be
considered for promotion, on the basis of punishment or
unsatisfactory record would require the necessary
provision in the statutory service Rules. There is no such G
provision under the 1998 Rules. [para 36) (589-H; 590-A]
2.4 It can also not be said that Circular No.17 of 2009
dated 30.11.2009 and Circular dated 12.7.2010 are to
ensure that the individual members of the DPC do not H
566 SUPREME COURT REPORTS [20131 2 s.c.~.
A recommend for promotion an individual officer despite
having been punished in the preceding 5 years. Such
curtailment of the power of the DPC would have to be
located in the statutory service rules. The 1998 Rules do
not contain any such provision. It is fallacious to presume
B that under the 1998 Rules, once an officer gets the
minimum marks in the written examination, he would be
entitled to be promoted on the basis of seniority alone.
There is no warrant for such a presumption. The
misconduct committed by eligible employee/officer would
c be a matter for DPC to take into consideration at the time
of performance appraisal. The past conduct of an
employee can always be taken into consideration in
adjudging the suitability of the officer for performing the
duties of the higher post [para 39] [591-F-H; 592-B-C]
D 2.5 Further, different rules/regulations of the banks
provide specific punishments such as "withholding of
promotion, reduction in rank, lowering in ranks/pay
scales". However, there is another range of penalty such
as censure, reprimand, withholding of increments etc.
E which are also prescribed under various staff regulations.
To debar such an employee from being considered for
promotion would tantamount to also inflicting on such
employee, the punishment of withholding of promotion.
In such circumstances, a punishment of censure/
F reprimand would, in fact, read as censure/reprimand + 5
years debarment from promotion. Thus the circulars
issued by the bank debarring such employees from being
considered would be clearly contrary to the statutory
rules. [para 40] [592-C-F]
G Sant Ram Sharma Vs. State of Rajasthan & Ors. (1968)
1 SCR 111 - relied on.
2.6 Therefore, the High Court, has rightly quashed the
said two Circulars and directed thpat the respondent be
H considered for promotion in accordance with the
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 567
KUMAR CHAK
applicable rules. [para 41) [592-GJ A
State of Mysore & Anr. Vs. Syed Mahmood & Ors. 1968
SCR 363 = AIR 1968 SC 1113 and Haryana State
Warehousing Corporation & Ors. Vs. Jagat Ram & Anr. 2011
(2) SCR 1151 = 2011 (3) SCC 422; State of T.N. Vs. Thiru B
=
KS. Murugesan & Ors. 1995 (2) SCR 386 1995 (3) SCC
273, L. Rajaiah Vs. Inspector General of Registration &
Stamps, Hyderabad & Ors. 1996 (2) SCR 136 = 1996 (8)
SCC 246; and Collector of Thanjavur Distt. & Ors. Vs. S.
Rajagopalan & Ors. (2000) 9 SCC 145 - cited.
c
Case Law Reference:
1998 (3) SCR 782 referred to para 11
(1968) 1 SCR 111 relied on para 19
D
2009 (15) SCR 936 held inapplicable para 19
2013(6) SCALE 345 held inapplfcable para 19
1968 SCR 363 cited para 21
2011 (2) SCR 1151 cited para 21 E
1991 (3) SCR 790 held inapplicable para 22
1995 (2) SCR 386 cited para 24
1996 (2) SCR 136 cited para 24 F
(2000) 9 sec 145 cited para 24
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
2970-2975 of 2013.
G
From the Judgment and order dated 08.12.2010 in WP
No. 58206/2005, WP No. 58214/2005, WP No. 59016/2005,
WP No. 59018/2005, WP No. 59035/2005 & WP No. 59758/
2005 of the High Court of Judicature at Allahabad.
WITH H
568 SUPREME COURT REPORTS [2013) 2 S.C.R.
A Civil Appeal Nos. 2989-2992 of 2013.
Civil Appeal Nos. 2976-2988 of 2013.
Civil Appeal Nos. 2993-3010 of 2013.
Dhruv Mehta, Yashraj Singh, Rajesh Kumar, Sriram
Krishna, Anupama Dhurve, Prashant Narang, Sarv Mitter, (for
B Mitter & Mitter Co.) for the Appellants.
Fakhruddin, Gopal Krishna, M.K. Chaudhary, Raj Kishore,
(For S.K. Verma, K.T. Anantharaman, Vasudevan Raghavan,
Neeraj Shekhar, Avdesh Kumar Singh, Ashutosh Thakur, Priya
c Ranjan Roi for the Respondent.
The Judgment of the Court was delivered by
SURINDER SINGH NIJJAR, J. 1. Leave granted in all
the Special Leave Petitions,
D
2. These appeals are directed against the common
judgment and final order dated 8th December, 2010 passed
by the High Court of Judicature at Allahabad in Writ Petition
Nos. 58206 of 2005 and in connected Writ Petition Nos. 58214,
E 59016, 59018, 59035 and 59758 of 2005, whereby the High
Court has allowed all the Writ Petitions and set aside the
Circular No. 17 of 2009 dated 30th November, 2009 and
Circular dated 12th July, 2010 in so far as they make a provision
to exclude the employees from consideration for promotion,
who are otherwise eligible to be considered for promotion and
F are within the zone of consideration, on the basis that they have
either obtained the 'D' rating in the annual performance report
or have been penalized for any misconduct in the preceding 5
years.
G Background:-
3. Before we take up for consideration, the issues
involved, it would be appropriate to briefly notice the
background leading to the present litigation.
H 4. There are currently about 82 Regional Rural Banks (for
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 569
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
short "RRBs") sponsored by various nationalized banks, set up A
under the R~gional Rural Banks Act, 1976 (for short "the RRB
Act, 1976"). There are about 67,000 employees of the Bank,
spread all over India mostly in the interiors.
5. To ensure uniformity amongst all the RRBs, Section 29
read with Section 17 of the RRB Act, 1976 empowers the B
Central Government to lay down the terms and conditions of
service of employees of all the banks. Section 17 of the RRB
Act, 1976 empowers the RRBs to appoint such number of
officers and other employees as it may consider necessary or
desirable in such manner as may be prescribed for the efficient C
performance of its functions and to determine the terms and
conditions of their appointment and service. Section 24 of the
Act lays down that in the discharge of its functions, RRBs shall
be guided by such directions in regard to matters of policy
involving public interest and the Central Government may, after D
consultation with the National Bank for Agriculture and Rural
Development (for short "NABARD"), may prescribe. Under
Section 29 of this Act, the Central Government has been
empowered to make rules after consultation with the NABARD
and the Sponsor Banks for carrying of the provisions of the E
RRB Act, 1976. By Clause (ba) of sub-section (2) of Section
29, which was inserted by the Regional Rural Banks
(Amendment Act), 1988, the Central Government was
empowered to make rules relating to the manner in which the
officers and other employees of the RRBs shall be appointed.
F
6. Till the year 1988, there were no statutory rules
governing the promotion of employees of RRBs and the same
were governed by various Circulars issued by the Central
Government and NABARD. On 1st December, 1987,
NABARD issued guidelines to all RRBs vide letter No. G
IDD.RRB.NO. C-78/316(GEN)/87-88, explaining the concept of
promotion by "Seniority-cum-Merit" as envisaging promotion by
seniority with due considerations to minimum merit/fitness
prescribed. Further, it was stipulated that "this rule envisages
promotion by seniority with due considerations to minimum H
570 SUPREME COURT REPORTS [2013] 2 S.C.R.
A merit/fitness prescribed. Fitness implies that there is nothing
against an 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 reasonable recent past". Although the aforesaid
B Circular was issued in relation to promotion of Managers to the
post of Area/Sr. Manager, it was observed that the similar
procedure may be followed in case of the promotion of Sr. Clerk
and internal promotion to Field Supervisor and Manager Posts.
7. The Central Government vide a Notification dated 28th
C September, 1988 framed statutory rules, known as Regional
Rural Banks (Appointment and Promotion of Officers and other
Employees) Rules, 1988 (for short "the RRB Rules, 1988).
These rules were made in exercise of the powers conferred on
the Central Government by Section 29 read with Section 17 of
D the RRB Act, 1976 after consultation with the NABARD and the
Sponsor Banks specified in the First Schedule of the Rules.
8. Second Schedule of the aforesaid Rules laid down the
criteria for appointment to different categories of posts whether
by direct recruitment or by promotion in all the RRBs. The
E criterion for promotion on all the posts was specified as
seniority-cum-merit. With regard to the post of Area I Senior ·
Manager, Clause 7 of Schedule 2 provided that the
-"
appointment on the aforesaid post shall be made 100% by
promotion from amongst confirmed officers working in the
F Bank. Promotion will be on the basis of seniority-cum-merit. If
suitable officers are not available internally, these posts are to
be filled by deputation in another banks or organization on
deputation.
9. Clause 7(c) pertains to the mode of selection, which
G provided for "interview and assessment of performance reports
for t11e preceding 3 years period as officer for promotion". It is
relevant to note here that in these rules, the provisions
pertaining to merit/fitness contained in the NABARD Circular
dated 1st December, 1987 were not incorporated. Even
H
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 571
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
though, the 1988 Rules have been promulgated in consultation A
with NABARD and the Sponsor Banks.
10. In spite of the promulgation of the RRB Rules, 1988,
the RRBs continued to make promotions by taking into
consideration the criteria laid down in the 1987 Circular in
B
addition to the provisions contained in the RRB Rules, 1988.
This led to the actions of the RRBs being challenged by way
of Writ Petitions in Andhra Pradesh High Court and Madhya
Pradesh High Court. Both the Andhra Pradesh as well as the
Madhya Pradesh High Court held that if seniority-cum-merit
criterion is adopted for the purposes of seniority, then the first C
senior most eligible employee has to be tested to find out
whether he possesses the minimum required merit for holding
the higher post and only if he is not found suitable or fit, his
immediate junior may be tested for the purpose of promotion.
These decisions of the High Courts were challenged by the D
various RRBs as well as the promoted officers whose
promotion has been set aside by this Court.
11 . The controversy was laid at rest by this Court in the
judgment delivered in the case of 8. V. Sivaiah & Ors. Vs. K.
Addanki Babu & Ors. 1 This Court distinguished the principle E
of "Merit-cum-Seniority" and the principle of "Seniority-cum-
Merit". It h.as been held that the principle of "Merit-cum-
Seniority" lays greater emphasis on merit and seniority plays
a less significant role. Seniority is to be given weight only when
merit and seniority are approximately equal. As between two F
officers of "seniority-cum~.merit", the criterion of seniority-cum-
merit lays greater emphasis on seniority. However, this Court
added a caveat that an officer can not claim promotion as a
matter of right by virtue of seniority alone and if he is found unfit
in the discharge of duties of the higher post, he may be passed G
over and the officer junior to him may be promoted. The
aforesaid judgment of this Court was delivered on 17th July,
1998.
1. (1998) 6 SCC720. H
572 SUPREME COURT REPORTS [2013) 2 S.C.R.
A 12. Thereafter on 29th July, 1998, in exercise of the powers
conferred by Section 29 read with Section 17 of RRB Act,
1976, in supersession of the RRB Rules, 1988, the Central
Government, after consultation with the National Bank and
Sponsor Bank specified in the Second Schedule, promulgated
B the Regional Rural Banks (Appointment and Promotion of
Officers and other Employees) Rules, 1998. The relevant
provision for appointment by promotion as a Scale II officer is
as under:-
"2.
c (a) Name of Post Scale II Officer
(b) Classification Group 'A'
(C) Source of appointment 100 % by promotion
D (d) Whether promotion to be Promotion shall be made on
made on seniority basis or the basis of seniority cum-
seniority-cum-merit - basis. merit
(e) Eligibility Officer holding post for eight
years as an officer on regular
E basis in the Regional Rural
Bank shall be considered for
promotion to Scale-II post in
that bank:
Provided that no officer shall
F be considered for promotion
unless he has been
confirmed in feeder grade
post:
Provided further that the
G Board may, with the prior
approval of National Bank
relax the qualifying service
for a period not exceeding
two years, if eligible officers
H are not available.
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 573
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
Note: A
(I) The officers eligible for promotion to the post of Area
Managers/Senior Managers/Officers Scale-II on or before
publication of this notification, shall continue to be
considered for promotion to Scale-II officer Post. B
(II) The service of the incumbents, who are holding the post
eligible for promotion before publication of this notification,
shall continue to be counted for the purpose of promotion
to the Scale II officer post.
c
(f) Mode of Selection The selection of the candidates
shall be made by the committee
on the basis of written test,
interview and assessment of
Performance Appraisal o
Reports for the preceding five
years as an officer in Scale I/
Field Supervisor.
(g) Compo$ition of The committee (for considering
Committee promotion) shall consist of the E
following persons, namely,
(i) The chairman of the
concerned Regional Rural
Bank-Chairman F'
(ii) A director nominated the
sponsor bank-Member.
(iii) A director nominated by the
National Bank Member. G
Note: If none of the members of the Committee belongs to
Scheduled Castes/Scheduled Tribes, the Board may nominate
a person belonging to Schedule Castes or Schedule Tribe as
an additional member and such person shall participate in the H
574 SUPREME COURT REPORTS [2013] 2 S.C.R.
A process of selection by the concerned committee.
(h} Reckoning of the The minimum eligibility in
minimum eligibility terms of the number of years
of service for promotion shall
B be reckoned as on the 1st
April of the year in which the
vacancy is expected to arise
or has actually arisen.
(i} Number of candidates The number of candidates to
c To be considered for be considered for promotion
Promotion from officer Scale I to officer
Scale lshall be restricted to
four times the number of
vacancies available for
D promotion.
0) Selection process for The Selection shall be on the
Promotion basis of performance in the
written test, interview and
E perforlmance appraisal
reports for preceding five
years as per the division of
marks given below.
(A} Written Test 60 Marks
F
(B} Interview 20 Marks
(C} Performance 20 Marks
Appraisal Reports
G TOTAL MARKS 100 MARKS
(A} Written.test (60 marks} The candidates shall be
required to appear for written
test comprising of two parts
H viz. part (A} covering Banking
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 575
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
Law and Practice of Banking A
and Part (B) covering Credit
Policy Credit Management
including priority Sector,
Economics andManagement.
B
60 marks allotted to written
test shall be further divided as
under:
Part "A" 30 Marks
c
Part "B" 30 Marks
A list of only those
candidates, who secure a
minimum of 40% marks in
10
each part shall be prepared
and such candidates shall be
called for interview. "
13. The Rules also provide that the written test shall be in
two parts viz. Part A and Part B, each consisting of 30 marks. E
It was provided that the list of those candidates shall be
prepared, who secure a minimum of 40% marks in each part
and such candidates shall be called for interview. Thus the
Rules had clearly introduced the minimum necessary merit as
laid down by this court in the case of B. V. Sivaiah (supra). F
However, it appears that one of the Sponsor Banks, namely
Punjab National Bank issued guidelines dated 27th February,
1999 laying down the "procedure to be adopted in RRBs for
promoiion in different cadres - clarification thereof', to all its
Sponsored Regional Rural Banks. G
Present Litigation:
14. Thereafter, the individual officers of erstwhile RRBs
filed 13 Writ Petitions before the High Court in the year 2004-
2005 on the ground that the Circular sought to debar totally from H
576 SUPREME COURT REPORTS [2013] 2 S.C.R.
A consideration for promotion, officers against whom disciplinary
action was pending or contemplated as well as those, who had
been. reprimanded or had obtained a 'D' rating in their annual
performance reports in the preceding 5 years before the
selection process commences.
B
15. Whilst the aforesaid matters were still pending, it
appears that the Punjab National Bank and Bank of Baroda
issued another clarification by the Circular No. 17 of 2009 dated
30th November, 2009. The aforesaid circular entitled
"Appointment and Promotion of Officers and other Employees
C of RRBs" reiterated the provision contained in the Notification
dated 29th July, 1998. Pursuant to the aforesaid, Sarva U.P.
Gramin Bank issued a Circular dated 12th July, 2010
incorporating the clarification contained in the Circular dated
12th July, 2010, subsequently reiterated on 30th November,
D 2009. The aforesaid Circulars were also challenged in Writ
Petition Nos. 55913, 50638, 50629, 51003 and 50633 of2010.
16. All the aforesaid writ petitions were clubbed and
decided by the High Court of Judicature at Allahabad by a
E common judgment dated 8th December, 2010. By the aforesaid
judgment, the High Court quashed the Circular No. 17 of 2009
dated 30th November, 2009 and Circular dated 12th July, 2010.
The appellant bank was directed to consider the claim of the
respondents (Writ Petitioners) for promotion in accordance with
F the procedure and method of punishment provided by the
competent authority for selections. The High Court in its
judgment concluded :-
"1. Where a person is eligible to be considered for
promotion, his exclusion, on the ground that he has
G suffered minor or major penalties, cannot be a ground to
exclude him from consideration. The competent authority,
as held in K. V. Janakiram (supra) and 8. V. Sivaiah
(supra), can lay down minimum standards required and
also prescribe mode of assessment of merit of the
H employees eligible to be considered for promotion. The
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 577
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
assessment can be made by assigning marks on the A
basis of appraisal of performance on the service record
and interview. The competent authority may also prescribe
minimum marks which would entitle a person to be
promoted on the basis of seniority-cum-merit. The
employee, however, cannot be excluded and denied his B
right to be corisidered by the selection committee for
promotion.
2. The persons, who have been awarded censure entry or
other minor punishments, thus cannot be excluded from the
zone of consideration for promotion. The question of C
assessment on merit is to be made by the Selection
Committee at the time of selection and not before that by
eliminating the person who is within the zone of
consideration.
D
3. We are further of the opinion that the circulars issued
by the bank cannot override the statutory Rules nor can
supplement it to the extent that the persons, who are
otherwise eligible to be considered for promotion, will be
rendered ineligible and will not be given a chance to be E
considered for promotion."
17. Aggrieved by the aforesaid observations and the
decision of the High Court, the appellant bank has filed the
present appeals.
F
SUBMISSIONS :
18. We have heard very lengthy submissions by the
learned counsel for the parties.
19. We may first briefly notice the submissions on behalf G
of the appellants. Mr. Dhruv Mehta, learned senior counsel
appearing for the appellants submitted that the Circular dated
30th November, 2009 and 12th July, 201 Owere not ultra vires
of the RRB Rules, 1998. The two Circulars have only
H
578 SUPREME COURT REPORTS (2013] 2 S.C.R.
A supplemented the RRB Rules, 1998, where they are silent. The
Circulars do not have the effect of supplanting the RRB Rules,
1998. He elaborated that the aforesaid Rules do not provide
for and/or are silent with regard to the treatment to be given I
meted out to the case where "adverse remarks" have been
B recorded against an officer during the preceding 5 years, i.e.,
period under consideration for promotion. H~ submitted that the
Sponsor Banks have merely reiterated the earlier Circular
issued by the NABARD on 1st December, 1987, which was
subsequently clarified on 27th February, 1999. The Circulars
. C dated 30th April, 2009 and 12th July, 2010 have merely
reiterated the earlier position. The appellant bank had only
reiterated the aforesaid guidelines after the amalgamation of
the small RRBs into one RRB (appellant bank) vide Notification
dated 30th November, 2007. However, these guidelines were
being followed by erstwhile RRBs also prior to amalgamation.
0 Learned senior counsel relied on the judgment in the case of
Sant Ram Sharma Vs. State of Rajasthan & Ors. 2 to submit
that it was .permissible for the appellant bank to fill up the gaps
and supplement the rules and issue instructions which were not
inconsistent with the statutory rules. Learned senior counsel
E further submitted that the aforesaid Circulars have been issued
in order to bring about uniformity as different RRBs were
following different procedures for making promotions on similar
posts. Since the Rules of 1998 are silent with regard to non-
consideration of officers, who have adverse remarks against
F them in the preceding 5 years, it was necessary to lay down
uniform guidelines. He emphasised that DPC under the RRB
Rules, 1998 consists of :- (a) Chairman, RRB, (b) Director
nominated by Sponsor Banks and (c) Director nominated by
NABARD. In the absence of uniform guidelines, DPC
G consisting of individuals will be conferred with power to decide
whether an individual officer despite having been punished in
the preceding 5 years should be recommended/selected for
promotion or not. According to Mr. Dhruv Mehta, introduction
H 2. (1968) 1 SCR 111.
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 579
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
of such a process will lead to infusion of arbitrariness in the A
process of promotion. In such circumstances, the promotion of
a particular officer, in spite of having been punished, will be
based entirely on the perception of individual members of
DPC. This could lead to more litigation by the officers, who are
not selected/approved for promotion in spite of having a clean B
record. He points out that without the aforesaid guidelines, an
officer, even though,. ,he has been punished for gross
misconduct, would have to be promoted in case he obtains
minimum 40% marks in the written test, because in other
parameters, namely interview and performance appraisal, the c
RRB Rules, 1998 do not prescribe minimum marks. Debarring
such a person from promotion would not be arbitrary as the
rationale behind such procedure is to weed out the unfit at the
initial stage. In support of this submission, the learned senior
counsel relied on the observations made by this Court in the
0
case of Rajendra Kumar Srivastava & Ors. Vs. Samyut
Kshetriya Gramin Bank & Ors. 3 The instructions, according to
him, merely prescribe minimum merit necessary for discharging
the function of the higher post. Therefore, the procedure
prescribed in the Circulars would not violate the concept of
promotion by seniority-cum-merit. Learned senior counsel E
further submitted that same procedure will be followed in
cases, where an officer has been communicated adverse
remarks and graded as 'D' in the 5 years preceding the
selection process. In support of this submission, the learned
counsel relied on certain observations made by this Court in F
Civil Appeal No. 6072 of 2012, Ram Ashish Dixit Vs.
Chairman, Purvanchal Gramin Bank & Ors.
~O. The next submission of Mr. Dhruv Mehta was that the
employee only has a right to be considered for promotion and G
does not have an absolute right to be promoted only on the
basis of seniority. Learned senior counsel reiterated that criteria
of "fitness", i.e., a candidate should not be found to be "unfit to
discharge the duties of higher post" is a condition implicit in
3. c2001> 1 sec 335. H
580 SUPREME COURT REPORTS [2013] 2 S.C.R.
A the criteria of promotion on the basis of "seniority-cum-fitness"
criteria.
21. Learned senior counsel has further submitted that
different rules prescribed different criterias for adjusting the
8 suitability of candidates for promotion viz. "seniority-cum-
fitness", "seniority-cum-merit" and "merit-cum-seniority".
However, the "fitness" of a candidate to discharge duties of
higher post, has to be considered necessary, relevant and an
implicit condition of promotions in all the above criterias. He
C draws support for the aforesaid submission from the judgment
of this Court in the case of State of Mysore & Anr. Vs. Syed
Mahmood & Ors. 4 and Haryana State Warehousing
Corporation & Ors. Vs. Jagat Ram & Anr. 5
22. Mr. Dhruv Mehta then submitted that the employee/
D officers, who have not been promoted in view of the guidelines
dated 30th November, 2009 and 12th July, 2010, had not been
debarred from consideration as they were, in fact, considered
along with all the other officers, who had completed the requisite
period of service but have been weeded out/eliminated at the
E threshold, in view of the fact that they had been either punished
or graded 'D' in the 5 year$preceding the selection. Learned
senior counsel further submitted that non-promotion of those
officers, who have either been punished or have been recipient
of adverse remarks such as Grade 'D', would not be violative
F of Article 14 and 16 of the Constitution of India. The candidates,
who have been imposed penalty/punishment or whose
performance is assessed as unsatisfactory during the period
under consideration for promotion can not be placed at par with
the candidates, who have not been imposed any punishment/
G penalty or whose performance has been outstanding, very good
or good during the said period. The classification made on the
basis ofthe service record is a reasonable classification and
has a nexus with the object sought to be achieved namely
4. AIR 1968 SC 1113.
H s. c2011) 3 sec 422
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 581
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
promotion to the next grade/cadre. In support of this, he relies A
on the judgment of this Court in the case of Union of India &
Ors. Vs. K. V. Jankiraman & Ors. 6
23. Mr. Dhruv Mehta has also brought to the attention of
this court the "subject wise bifurcation" of the present special
leave petitions, which appears to have been premised on the B
basis of different levels of punishment imposed on the writ
appellants/respondents herein which rendered them ineligible
from consideration for promotion. The bifurcation is as under :
(i) SLP (C) No. 9284-9301/2011: The concerned
employees in this bunch were rendered ineligible for C
consideration for promotion due to imposition of
punishment on them during the preceding five years.
(ii) SLP (C) No. 9181-86/2011: The assessment of the
concerned employees in this bunch was rendered
0
"unsatisfactory'', i.e., they were rated "D" in any one
year out of preceding five years.
(iii) SLP (C) No. 9432-9444/2011 : Some punishment
was imposed on the employees herein during the
preceding five years and also, their performance E
was rated as unsatisfactory, i.e., they were rated
"D".
(iv) SLP (C) 9306-9309/2011: Issues raised by the writ
petitioners herein were not same/similar to the lead
matter therein. F
24. Lastly, he submits that this Court in a catena of
judgments has held that an employee can be validly debarred
from consideration for promotion during the rigour of
punishment. He has made a reference to the following
judgments:- G
State of T.N. Vs. Thiru K.S. Murugesan & Ors. 7; L. Rajaiah
Vs. Inspector General of Registration & Stamps,
a. (1991) 4 sec 109.
7. (1995) 3 sec 273. H
582 SUPREME COURT REPORTS [2013) 2 S.C.R.
A Hyderabad & Ors. 8 and Collector of Thanjavur Distt. &
Ors. Vs. S. Rajagopalan & Ors. 9
25. On the other hand, learned senior counsel for the
respondent, Mr. Fakhruddin, submitted that the submissions
made by the appellants about the usurpation of the power of
B selection of the management by the members of the DPC
clearly indicates that the two Circulars have not been issued
bonafide and are in fact intended to whittle down the role and
powers of Independent Selection Committee prescribed in the
statutory rules of 1998. The function of selection has been
C statutorily conferred on the DPC, and can not be permitted to
be usurped by the Bank Management. He further submitted that
by virtue of Section 29 and Section 17 of the RRB Act, 1976,
the powers to determine the service conditions including
promotions of the employees of the RRBs are vested in the
o Central Government. Therefore, the two Circulars can not be
permitted to prevail over the provision of the statutory rules of
1998. Mr. Fakhruddin emphasised that Government of India
has promulgated the aforesaid rules in consultation with
NABARD and the Sponsor Bank. Even then, no provision has
E been made in the aforesaid rules to debar the employees/
officers for being considered for promotion amongst them who
fall in the zone of consideration, on the basis that they have
been either penalized or given an unsatisfactory/'D' rating
annual performance appraisal report. It is submitted by all the
F learned counsel appearing for the respondent that the RRB
Rules, 1998 are in consonance with the observations made by
this Court in the case of B. V. Sivaiah (supra) and is a cpmplete
code, which does not need to be supplemented by any
instructions. It is further submitted that in the guise of laying
down minimum marks as a benchmark to determine the
G suitability/fitness/merit for promotion, the appellants have
introduced the criteria of merit-cum-seniority in the place of
seniority-cum-merit. Such change in the criteria could only be
s. (1996) s sec 246.
H 9. (1995) 3 sec 273.
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 583
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
made by making the necessary amendment in the Rules and A
not by issuing guidelines/Circulars by the Sponsor Banks or
NABARD.
26. Learned senior counsel further submitted that the two
Circulars are wholly arbitrary since even the employees who had
been only given the lowest penalty of censure or reprimand can B
be eliminated at the threshold, from being considered for
promotion. It is further submitted by the learned counsel for the
respondent that blanket debarment will have the effect of giving
an unbridled/untrampled power in the hands of the superiors
of an employee. Such power can be abused and misused to C
give/deny "pr9motion to a particular employee/officer due to
personal reasons and likes and dislikes of a particular officer''.
Learned senior counsel, therefore, submitted that the High Court
has correctly quashed the aforesaid two Circulars.
CONSIDERATION/CONCLUSIONS : D
27. We have given due consideration to the submissions
made by the learned counsel for the parties. It is by now settled
beyond cavil that statutory rules can be supplemented but can
not be supplanted. This is the ratio of law laid down in the case
of Sant Ram Sharma (supra). It has been reiterated by this E
Court in a catena of subsequent judgments. It is, however, not
necessary to burden the present judgment by making a copious
reference to the other decisions which merely reiterated the
same ratio.
28. We have noticed earlier that till 1988, there were no F
statutory rules governing the promotions of the employees of
RRB. The promotions in these banks were governed by various
Circulars issued by the Government, NABARD and the
Sponsor Banks. One such Circular is dated 1st December,
1987, which provided that the word "merit", provides that G
criteria of seniority-cum-merit envisages promotion by seniority
with due consideration to minimum merit/fitness prescribed.
However, the Circular further provided that fitness implies that
there is nothing against an officer, no disciplinary. action is
pending against him and none is contemplated. The officer has H
584 SUPREME COURT REPORTS [2013] 2 S.C.R.
A neither been reprimanded nor any adverse remarks have been
conveyed to him in the reasonable recent past.
29. The aforesaid Circular is prior in time to the RRB
Rules, 1988. The aforesaid rules clearly provided that
promotion shall be made by following the criteria of seniority-
B cum-merit. Rule also provides that any officer/employee having
8 years of service as an officer/employee shall be eligible to
be considered for promotion. The criteria for determining the
minimum merit required of the candidate for promotion is to be
ascertained on the basis of his performance in the written test,
C interview and his assessment in the performance appraisal
report. There is no provision in the Rules that .an employee/
officer, who has been punished in the 5 years preceding the
selection process or has been given an adverse remark or
graded 'D' shall not be considered for promotion at all. The
D Circular dated 1st December, 1987 was, therefore, clearly
contrary to the 1988 statutory rules, and, therefore, ceased to
have any legal effect from the date of the enforcement of the
rules.
30. It is a matter of record that the RRB Rules, 1988 were
E superseded by the RRB Rules, 1998. The aforesaid rules
incorporated the principle of minimum merit as enunciated by
this Court in B. V. Sivaiah (supra). In Paragraph 18 of the
aforesaid judgment, this Court observed as follows:-
"18. We thus arrive at the conclusion that the criterion of
F "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
G assessing the minimum necessary merit, the competent
authority can lay down the minimum standard that is
required and also prescribe the mode of assessment o~
merit of the employee who is eligible for consideration for
promotion. Such assessment can be made by assigning
H marks on the basis of appraisal of performance on the.
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 585
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
basis of service record and interview and prescribing the A
minimum marks which would entitle a person to be
promoted on the basis of seniority-cum-merit."
31. Following the aforesaid observations, the RRB Rules,
1998 have introduced a detailed procedure for determining the
minimum merit for promotion to the next higher post/grade. The B
RRB Rules, 1998 clearly provided that officers holding post in
8 years as an officer on regular basis in the RRB shall be
con·sidered for promotion to the next higher post. The aforesaid
rule does not provide that any employee/officer, who has
· suffered a punishment or has received an adverse appraisal/ C
Grade 'D' in the performance appraisal, shall not be eligible.
However, the Circulars dated 30th November, 2009 and 12th
July, 2010 enables the appellant banks to eliminate such
employees, which is clearly contrary to the provisions contained
in the statutory service rules. The procedure prescribed under o
the aforesaid two Circulars clearly has the effect of supplanting
the provision of eligibility, which is not permissible.
32. Such an additional provision can not be justified on the
basis that it would form part of the minimum merit required to
be considered for promotion. In our opinion, the reliance placed E
in support of this proposition on the judgment in the case of
Rajendra Kumar Srivastava (supra) is wholly misplaced. In the
aforesaid judgment, this Court has observed as follows:-
"11. It is also well settled that the principle of seniority-cum-
merit, for promotion, is different from the principle of F
"seniority" and the 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 Js not automatic
with reference to seniority alone. Merit will also play a G
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 H
586 SUPREME COURT REPORTS .[2013] 2 S.C.R.
A then promote the candidates who are found to possess
the minimum necessary merit strictly in the order of
seniority. The 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
B their work performance during the previous 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
c for ascertaining the minimum necessary merit, as a basic
requirement, will not militate against the principle of
seniority-cum-merit"
33. These observations clearly apply at the time when the
eligible persons are being considered for promotion by the
D . DPC. Eligibility under the rules is on the basis of minimum
length of service - eight years, unless relaxed by two years
confirmation in the lower/feeder post. It is not possible to accept
the submission of Mr. Dhruv Mehta that bare minimum merit
can be determined even before the list of candidates is placed
E before the DPC for consideration of their merit. Rule (2e) clearly
provides firstly for the determination of the eligibility, as noticed ·
above. The criteria for promotion (seniority-cum-merit) is
provided in Rule 2(d). Rule 2(f) provides for "mode of
selection". It is clearly provided that "the selection of the
F candidates shall be made by the committee ............ ". The
second part of Rule 2(f) provides the criteria for determination
of the bare minimum merit. In fact, for this very reason, the rules
themselves provide that in orc;ler to succeed in the written test,
a candidate has to secure a minimum 40% marks in each part
G of the written test consisting of 30 marks each. It is only when
all the candidates within the zone of consideration have
participated in tha selection procedure and their performance
is assessed on the basis of written test, interview, and past
performance i.e. performance appraisal that the minimum merit
would become relevant. When the bare minimum merit of the
H candidates is determined, the promotion shall be made on the
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 587
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
basis of seniority irrespective of the better performance of the A
junior candidates in the written test/interview/performance
appraisal.
34. Similarly, the reliance placed by Mr. Dhruv Mehta on
the judgment of this Court in K. V. Jankiraman's case (supra)
is also misplaced. In this judgment, this Court considered the B
circumstances under which the banks could resort to the
"sealed cover procedure", when considering the claims of the
eligible candidates for promotion. The court also examined the
impact· of departmental punishment for assessment of the
suitability of an employee for promotion. The relevant ratio of c
this Court is as under :
· "29. According to us, the Tribunal has erred in holding that
when an officer is found guilty in the discharge of his duties,
an imposition of penalty is all that is necessary to improve
his conduct and to enforce discipline and ensure purity in D
the administration. In the first instance, the penalty short
of dismissal will vary from reduction in rank to censure.
We are sure that the Tribunal has not intended ttJat the
promotion should be given to the officer from the original
date even when the penalty imparted is of reduction in E
rank. On principle, for the same reasons, the officer cannot
be rewarded by promotion as a matter of course even if
the penalty is other than that of the reduction in rank. An
employee has no right to promotion. He has only a right
to be considered for promotion. The promotion to a post F
and more so, to a selection post, depends upon several
circumstance~. To qu.alify for promotion, the least that is
expected of an employee is to have an unblemished
record. That is the minimum expected to ensure a clean
and efficient administration and to protect the public G
interests. An employee found guilty of a misconduct cannot
be placed on par with the other employees and his case
has to be treated differently. There is, therefore, no
discrimination when in the matter of promotion, he is
treated differently. The least that is expected of any
.H
588 SUPREME COURT REPORTS [2013] 2 S.C.R.
A administration is that it does not reward an employee with
promotion retrospectively from a date when for his conduct
before that date he is penalised in praesenti. When an
employee is held guilty and penalised and is, therefore, not
promoted at least till the date on which he is penalised,
B he cannot be said to have been subjected to a further
penalty on that account. A denial of promotion in such
circumstances is not a penalty but a necessary
consequence of his conduct. In fact, while considering an
employee for promotion his whole record has to be taken
c into consideration and if a promotion committee takes the
penalties imposed upon the employee into consideration
and denies him the promotion, such denial is not illegal and
unjustified. If, further, the promoting authority can take into
consideration the pe,.-ialty or penalties awarded to an
D employee in the past while considering his promotion and
deny him promotion on that ground, it will be irrational to
hold that it cannot take the penalty into consideration when
it is imposed at a later date because of the pendency of
the proceedings, -although it is for conduct prior to the date
the authority considers the promotion. For these reasons,
E
we are of the view that the Tribunal is not right in striking
down the said~portion of the second sub-paragraph after
clause (iii) of paragraph 3 of the said Memorandum. We,
therefore, set aside the said findings of the Tribunal."
F These observations make it abundantly clear that
promotion can be justifiably denied to eligible candidate at the
time ofhis/het performance appraisal by the DPC. The fact that
the officer/employee has been departmentally punisheCI would
form part of the service record and can be taken into account
by the DPC. In such circumstances, the employee cannot
G possibly claim to have been subjected to a further penalty on
the basis of the misconduct which led to his punishment. This,
however, would not permit the management to debar an
employee from being considered for promotion at the stage of
considering whet,!1er such an employee is "eligible" to be
H considered in terms of Rule 2(e).
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 589
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
35. The observations in Rajendra Kumar Srivastava A
(supra) also do not support the submissions made by Mr. Dhruv
Mehta. In paragraph 13, it is observed as follows :
"13. Thus it is clear that a process whereby eligible
candidates possessing the minimum necessary merit in
the feeder posts is first ascertained and thereafter, B
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 C·
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 D
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 seniority- E
cum-merit."
These observations also make it clear that whilst
assessing the eligibility of the ~ndidates, determination of bare
minimum merit is not envisaged. There is, in fact, a complete
segregation of Rule 2(e) from Rule 2(f). Determining the F
eligibility of candidate is in the nature of a ministerial function.
The management merely has to see that the candidate
possesses the minimum length of service and that he/she is
confirmed in the feeder cadre. The determination of bare
minimum merit is on the basis of the performance in the written G
test/interview and performance appraisal. This is the function
of the Selection Committee i.e. Departmental Promotion
Committee.
36. There i~ no doubt that punishment and adverse service
record are relevant to determine the minimum merit by the H
590 SUPREME COURT REPORTS [2013] 2 S.C.R.
A DPC. But to debar a candidate, to be considered for
promotion, on the basis of punishment or unsatisfactory record
would require the necessary provision in the statutory service
Rules. There is no such provision under the 1998 Rules.
37. In B. V.Sivaiah (supra), this Court laid down the broad
B contours defining the term "bare minimum merit" in the following
words:
"We thus arrive at the conclusion that the criterion of
'seniority-cum-merit' in the matter of promotion postulates
that given the minimum necessary merit requisite for
c· 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
D 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
E promoted on the basis of seniority-cum-merit."
From the above, it becomes clear that the determination
of the bare minimum criteria is the function of the DPC and
cannot be taken-over by the management at the time of
F determining the eligibility of a candidate under Rule 2(e).
38. The reliance placed by Mr. Dhruv Mehta on the
judgment of this court in the case of Ram Ashish Dixit (supra)
is also misconceived. In the aforesaid case, the officer had
been considered for promotion during the pendency of the
departmental proceedings to Middle Management Grade II.
G However, the result was kept in a sealed cover. After finalization
of the proceedings, the appellants requested the authority to
open the sealed cover. He was, however, informed that he can
not be promoted in view of the bank Circular dated 28th March,
1998 as he had been punished. Subsequently, again his case
H was to be considered for promotion in September, 1999.
SARVA U.P. GRAMIN BANK & ORS. v. MANOJ 591
KUMAR CHAK [SURINDER SINGH NIJJAR, J.]
However, he was denied consideration for promotion in view A
of the conditions contained in Circular dated 28th March, 1998.
It was submitted on behalf of the appellants that the punishment
imposed upon the staff of the Bank can not be treated to be
an ineligibility for promotion since the eligibility for promotion
is prescribed under the RRB Rules, 1988. It was submitted on
behalf of the bank (respondent therein) that since stoppage of B
increment for 3 years is a punishment imposed upon the
appet1ants, during the period, he would be undergoing
punishment, he could not have been considered to be eligible
for promotion. Therefore, according to the bank, respondent had
been rightly held to be ineligible under Circular dated 28th C
March, 1998. It was also claimed by the bank that the Circular
is supplementary in nature and can not be said to be in any
manner inconsistent and ultra vires of the rules. In answering
the rival submissions, this Court held as under:-
''The criteria for promotion from Junior Manager Grade-I 0
to Middle Management Grade-II is on the basis of the
seniority-cum-merit. Clearly therefore, the fact that the
appellant has been punished for a misconduct, the same
would form a part of his record of service which would be
taken into consideration while adjudging his suitability on
the criteria of seniority-cum-merit. If on such assessment E
of his record of service the appellant is not promoted, it
cannot be said to be by way of punishment. It is a non-
promotion on account of the appellant not reaching a
suitable standard to be promoted on the basis of the
criteria." F
39. We also do not find any merit in the submission of Mr.
Dhruv Mehta that the Circular No.17 of 2009 dated 30th
November, 2009 and Circular dated 12th July, 2010 are to
ensure that the individual members of the DPC do not
recommend for promotion an individual officer despite having
been punished in the preceding 5 years. Such curtailment of G
the power of the DPC would have to be located in the statutory
service rules. The 1998 Rules do not contain any such provision.
The submission needs merely to be stated, to be rejected. We
also do not find any merit in the submission of Mr. Mehta that
without the aforesaid guidelines, an officer, even though, he has H
592 SUPREME COURT REPORTS [2013] 2 S.C.R.
A been punished for gross misconduct would have to be permitted
to be promoted as no minimum marks are prescribed for
interview or performance appraisal. In our opinion, it is
fallacious to presume that under the 1998 Rules, once an officer
gets the minimum marks in the written examination, he would
be entitled to be promoted on the basis of seniority alone.
B There is no warrant for such a presumption. The misconduct
committed by eligible employee/officer would be a matter for
DPC to take into consideration at the time of performance
appraisal. The past conduct of an employee can always be
taken into consideration in adjudging the suitability of the officer
c for performing the duties of the higher post.
40. There is another very good reason for not accepting
the submissions ma de by Mr. Dhruv Mehta. Different rules/
regulations of the banks provide specific punishments such as
''withholding of promotion, reduction in rank, lowering in ranks/
pay scales". However, there is another range of penalty such
D as censure, reprimand, withholding of increments etc. which are
also prescribed under various staff regulations. To debar such .
an employee from being considered for promotion would
tantamount to also inflicting on such employee, the punishment
of withholding of promotion. In such circumstances, a
E punishment of censure/ reprimand would, in fact, read as
censure/reprimand + 5 years debarment from promotion. Thus
the circulars issued by the bank debarring such employees
from being considered would be clearly contrary to the statutory
rules. The circulars clearly do not fall within the ratio in Sant
Ram's case (supra}.
F
41. In our opinion, the observations made by this Court in
the case of Ram Ashish Dixit (supra} are a complete answer
to the submissions made by the learned counsel for the
appellants, Mr. Dhruv Mehta. Therefore the High Court, in our
opinion, has rightly quashed the aforesaid two Circulars and
G directed that the respondent be considered for promotion in
accordance with the applicable rules.
42. We, therefore find no merit in the civil appeals filed by
the appellant-bank, and are accordingly dismissed. No costs.
R.P. Appeals dismissed.
H
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