Nagarjuna Grameena Bank and Others vs Nagarjuna Grameena Bank Officers Association and Others

P. Venkatarama Reddi, J.—In the writ petitions, which give rise to these writ appeals, the validity of promotions to the cadre of Area Managers, Branch Managers, Field Supervisors and Senior Clerk-cum-Cashiers employed in various Grameena Banks located in the State of Andhra Pradesh was in issue. The learned single Judge, following the Division Bench Judgment of this Court in K.V.T. Prasanna Kumar and Others Vs. Rayalaseema Grameena Bank and Others, (Upheld by Supreme Court in B.V. Sivaiah and Others etc. Vs. K. Addankl Babu and Others etc., allowed the writ petitions and set aside the promotions. The Banks were directed to make fresh selections on the basis of seniority-cum-merit within the time limit prescribed in the judgment. The Grameena Banks-established under the provisions of the Regional Rural Banks Act have filed these writ appeals against the order of the learned single Judge. Some of the promoted officers of the Banks have also filed the appeals. At the stage of admission of the writ appeals, a Division Bench of this Court felt that the decision in K.V.T. Prasanna Kumar and Others Vs. Rayalaseema Grameena Bank and Others, (Upheld by Supreme Court in B.V. Sivaiah and Others etc. Vs. K. Addankl Babu and Others etc., may require reconsideration in view of certain Government Orders and statutory Rules which were not placed before the Bench which decided K.V.T. Prasanna Kumar and Others Vs. Rayalaseema Grameena Bank and Others, (Upheld by Supreme Court in B.V. Sivaiah and Others etc. Vs. K. Addankl Babu and Others etc., . Hence the learned Judges directed these writ appeals to be placed before a Full Bench. That is how the writ appeals are before this Full Bench.

The order of reference to the Full Bench has practically become redundant in the light of the judgment of the Supreme Court rendered on 17-7-1998 upholding the decision of this Court in Prasanna Kumar''s case; what needs to be done now is merely to apply the law laid down by the Supreme Court.

The Supreme Court in B.V. Sivaiah and Others etc. Vs. K. Addankl Babu and Others etc., endorsed the view taken by this Court that the criterion of seniority-cum-merit ought to be applied while effecting promotions to the category of officers. Inasmuch as the procedure followed while considering the cases of the eligible employees for promotion did not accord with the guiding principle of seniority-cum- merit as expounded by the Supreme Court, the Supreme Court held that the High Court was justified in setting aside the selections and the consequential promotions. The provisions of the Regional Rural Banks (Appointment and Promotion of Officers and other Employees) Rules were referred to by the Supreme Court while reaching the conclusion. The Supreme Court clarified the legal position flowing from the application of the principle of seniority- cum-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 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."

The reasoning of their Lordships is amplified in paragraph 26 by giving a concrete illustration. We consider it appropriate to extract paragraph 26 of the judgment from which the ratio decidendi can be discerned with clarity:

"Having heard the learned Counsel for the Rayalaseema Grameena Bank as well as five Branch Managers who had been promoted as Area/Senior Managers in the proceeding on December 1,1989, we find that no case is made out for interference with the said view of the High Court. The promotion process laid down by the Rayalaseema Grameena Bank in its circular dated September 27,1989, on the basis of which the selection for promotion had been made on December 1,1989, sets apart 34 marks for seniority, 10 marks for qualifications, 20 marks for interview and 56 marks for performance which shows that out of a total number of 120 marks, the maximum number of marks that could be awarded for seniority is 34 and that 0.75 mark was to be given for each completed month of service over and above the minimum qualifying service. In other words, if two persons are appointed on the same day, the same number of marks had to be awarded for seniority. Moreover, out of a total number of 120 marks, more than 50% of marks were set apart for interview and performance. The High Court has found that only those officers who had secured the highest number of marks were ultimately promoted. It is not a case where minimum qualifying marks are prescribed for assessment of performance and merit and those who secure the prescribed minimum qualifying marks are selected for promotion on the basis of seniority. In the circumstances, it must be held that the High Court has rightly come to the conclusion that the mode of selection that was in fact employed was contrary to the principle of ''seniority-cum- merit'' laid down in the Rules. Civil Appeal Nos. 3799-3803 of 1996 filed by Rayalaseema Grameena Bank as well as Civil Appeal Nos. 3811-3812 of 1996 filed by the promoted officers are, therefore, liable to be dismissed."

There is practically no dispute that the selections made in the instant cases are vitiated for the same reasons which impelled the High Court and the Supreme Court to invalidate the selections.

Sri A. Krishnamurthy, the learned Counsel appearing for Satavahana Grameena Bank, has, however, contended that the decision of the Supreme Court does not deprecate the methodology adopted by the Bank which has awarded higher percentage of marks to seniority and allocated marks appropriate to other items such as performance appraisal and interview. The learned Counsel submits that the circulars issued by NABARD were followed by the appellant-Bank and the procedure envisaged by the circular was approved by the Supreme Court in Sr. Jagathigowda, C.N. and Others Vs. Chairman, Cauvery Gramina Bank and Others, . The learned Counsel has drawn our attention to paragraph 16 of the judgment in B.V. Sivaiah''s case (2 supra). We do not think that the Supreme Court put its seal of approval on the principle of merit-cum-seniority which was the guiding principle evolved in the circular of NABARD. In B.V. Sivaiah''s case (2 supra) their Lordships of the Supreme Court have categorically pointed out that the judgment in Sr. Jagathigowda, C.N. and Others Vs. Chairman, Cauvery Gramina Bank and Others, does not make a departure from the law laid down by the Supreme Court in its earlier judgments explaining the criterion of seniority-cum-merit. The Supreme Court noted that in Sr. Jagathigowda, C.N. and Others Vs. Chairman, Cauvery Gramina Bank and Others, those who secured 85 marks for seniority, performance and interview were short-listed for promotion and 85 marks out of 150 marks was treated as the minimum standard of merit for purposes of promotion and those who satisfied the said minimum standard were selected for promotion on the basis of seniority. That is how Sr. Jagathigowda, C.N. and Others Vs. Chairman, Cauvery Gramina Bank and Others, was explained. On the basis of the material placed before us including the affidavit filed in Writ Appeal No. 120 of 1996 as well as the marks-sheet, we are unable to say that the principle of seniority-cum-merit as interpreted by the Supreme Court was adopted in the instance cases. It is quite clear from the material placed before us that there was a comparative assessment of merit of various candidates who participated in the selection. No minimum standard of merit of efficiency was admittedly fixed. In this fact-situation, the contention of the learned Counsel cannot be accepted. We cannot subscribe to the view that despite the affirmance of the judgment of High Court condemning the selections which were made in the same manner in which the selections were made by Satavahana Grameena Bank, the selections in the instant cases would still be upheld. It is also worthy of note that the Supreme Court took into account the Appointment and Promotion Rules framed under the Regional Rural Banks Act. With the framing of such Rules, the circular of NABARD cannot have any sanctity except insofar as it fills up any gaps. We have, therefore, no hesitation in rejecting the contention of the learned Counsel Sri A. Krishnamurthy.

It is pointed out by some of the Counsel for the appellants that most of the employees who were promoted about seven or eight years back are continued and even if the revised criterion is applied as per the decision of the Supreme Court there is likelihood of many of them getting re-selection. Having due regard to this submission and in view of the fact that the reversion of the promoted respondents at this juncture is likely to dislocate the work in the Banks while at the same time not resulting in any positive advantage to the writ petitioners, we are of the view that till the fresh selections are made status quo as to the positions held by the promoted Officers who are either appellants or respondents in this batch of cases shall be maintained. We further direct that the process of fresh selections shall be completed in accordance with the law laid down by the Supreme Court within a period of four months from the date of receipt of a copy of this judgment.

The Writ Appeals are dismissed subject to the above directions. No costs.