Oriental Bank Of Commerce vs P.K. Jain And Others
2001 Latest Caselaw 428 Del

ORDER

Arijit Pasayat, C.J.

1. This appeal under Section 100 of the Code of Civil Procedure, 1908 (in short, the Code) involves the following questions which were formulated for adjudication by order dated 24-4-1995 :-

1. Whether the Trial Court as well as the First Appellate Court have put the correct interpretation to the provisions of Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 as well as the to the Article of Association of the appellant Bank?

2. Whether the courts have misinterpreted and misapplied the law by directing automatic promotion to respondent No.1 when admittedly all persons were selected by the process of an interview?

3. Whether the Court were correct in directing promotion of respondent no 1 to a higher post and without the usual process of selection?

2. Background facts necessary for adjudication of the issues involved are essentially as follows:-

Appellant Oriental Bank of Commerce (hereinafter referred to as defendant No.1) was nationalised by Banking Companies ( Acquisition and Transfer of Undertaking ) Act 1980 (in short the Act). On 20.5.1982, Board of Directors of the Bank laid down certain criteria for promotion to the post of Area Manager to meet the need for appointment to certain posts. According to the Bank, the same was in line with section 19(3) of the Act. Regulations governing the criteria for promotion etc were brought into force w.e.f. 1.1.1983. Respondent No.1 (P.K. Jain) is the plaintiff who filed a suit for permanent injunction and declaration. Prayer was for a declaration that he should be promoted as Deputy Chief/Assistant General Manager with effect from 11.6.1982 with corresponding benefits and to declare promotion of defendants 3 to 21 as null and void. He also prayed for an order of restrain by way of permanent injunction restraining the bank from effecting confirmation of defendants 3 to 21 or giving any further promotion to them above the rank of the plaintiff. It was plaintiff's case that defendants 7 to 13 did not fulfilll the eligibility criteria but were called for interview and only defendants 3 to 6 could have been considered for promotion along with the plaintiff. Defendants 7 to 21 who were promoted were junior to the plaintiff in gradation list. By judgment dated 27.1.1994, learned Subordinate Judge allowed the suit on the ground that once the Act came info force, the Board of Director could not have formulated new guidelines except the guidelines under section 19(1). As guidelines of the Board were not in consonance with Section 19(1), they would be of no legal consequence. Accordingly, she declared that the plaintiff (respondent No.1 herein) has to be treated to have been promoted on 11.6.1982 along with other defendants with all benefits of pay and seniority and other allied benefits including further promotions if any to which he is eligible as, if he stood promoted on 11.6.1982. Prayer for declaring promotion of respondent 3 to 21 as irregular was rejected. An appeal was preferred by the Bank defendant No.1. Learned Additional Sessions Judge held that rules or criteria framed by the Board of Directors could be done only in accordance with Section 19(1) and as such modification or variation could not have come into force without the previous sanction of the Central Government and view of learned subordinate Judge was correct. Accordingly the appeal of the appellant was rejected. The Bank has filed the present second appeal.

3. In support of the appeal the appellants have submitted that under Section 19(3) of the Act, the Bank was empowered to pass a resolution for filling up vacancy that had arisen especially when there was no promotion policy operative in the Bank. Before Regulations were framed under section 19(1), during the intervening period, Section 19(3) was to hold the field and Articles of Association having been disjunctively used in the Section, Board of Directors was empowered to pass necessary resolution deriving powers from the said Articles. Admittedly there were no Bye laws, Rules or Regulations framed by the Bank as it had no authority to frame bye laws which could only be done by an authority constituted under the law. The policy adopted by the appellant Bank was clearly covered by Section 19(3). So far as the directions for promotion without selection are concerned, the same is legally untenable. Even if it is conceded for the sake of argument that Section 19(3) of the Act did not come to the assistance of the appellant Bank, the net result would be that the resolution dated 27.10.1978 would be operative and the plaintiff can be only considered for promotion in terms of the said resolution. Learned counsel for the Bank further submitted that we need not go into the question whether criteria laid down on 25.8.1982 is in line with Section 19(3) of the Act, if it is held that direction for promotion could not have been given. It is further pointed out that the direction is clearly untenable because the plaintiff was considered in all the processes of promotion for several years i.e. in 1978, 1979 and 1980 ( earlier to the impugned selection) but he was not found suitable in 1988, 1990 and 1991 ( after the impugned selection) he was called for selection but he did not appear. He was also called for interview in July-August, 1986 but was not recommended for promotion. Finally he was called for interview in march, 1998. He appeared and was found suitable and was offered promotion from 1.4.1998. Additionally, out of 55 persons who were selected, promotion given only to 29 persons i.e. defendants 3 to 31 is under challenge.

4. Learned counsel for the plaintiff-respondent, on the other hand, submitted that if 1978 resolution is to be treated as operative then the plaintiff was to be considered and he having not been considered, there was no embargo on the trial Court and the appellate Court to direct promotion to be given without selection. It is submitted that though under the writ jurisdiction or industrial laws such a direction for promotion cannot be given, a civil Court under Section 9 of the Code has ample power to give such directions. Additionally, it is submitted that promotions maintained by the learned Subordinate Judge and the First Appellate Court have no legal basis. The scope for considering comparative merit would come into the picture. If they are excluded from the zone of consideration, the plaintiff would be the only person eligible and therefore his promotion has to be automatic. Learned counsel appearing for the employees whose promotions have been maintained by both the Courts below submitted that there is no scope for comparison, and the promotion as claimed by the plaintiff has to be considered on merits. Additionally all the persons who were given promotion have but been imp leaded as parties in the proceedings and as such the second suit was not maintainable.

5. As the learned counsel for Bank has prayed for consideration of the mater without going into applicability of guidelines formulated in 1982 in the background of Section 19(3) of the Act, we restrict the consideration of the issue to the only question as to whether the Courts below were justified in directing automatic promotion to the plaintiff-respondent without his undergoing selection process. We may indicate here that respondent No.1's stand is that Civil court has jurisdiction while functioning under Section 9 of the Act to direct the promotion without selection and not for consideration. As regards the right to be considered for promotion it has to be noted that rule which confers a right of actual promotion or a right to be considered for promotion is a rule prescribing a condition of service. This proposition can no longer be disputed in view of the Apex Court's decision in Mohd Bhakar vs Krishna Reddi 1970 SLR 768 that any rule which effects the promotion of a person relates to his conditions of service. Thought a right to be considered is a condition of service, a rule which merely affects chance of promotion cannot be regarded as a condition of service. These aspects were highlighted by the Constitution Bench in Mohd Sujat Ali vs. UOI and others .

6. Promotion as understood under the service law jurisprudence means advancement in rank, grade or both. although promotion is a normal incident of service, the true effect of the condition would depend on the nature of right created which in turn would depend on a proper interpretation of the relevant rules or norms of promotion applicable to the service.

The mere circumstance that the concerned employee was put on a panel for promotion does not mean that he would have been automatically promoted to the higher post. Being empanelled for promotion confers upon the person concerned the limited right of being considered for promotion, which is another way of saying that persons who are put on the panel framed for promotion to a higher post are at a given moment considered eligible for promotion. ( See. N.M. Siddique v. UOI 1978(1) SLR 279). The right so far as promotion is concerned is one to be considered and not one to be promoted. In other words, there is no inherent right to be promoted, unless the rules provide otherwise. For, example, if the rules provide that promotion will be awarded on the basis of seniority and nothing more, then the employee who is senior most in the feeder post can successfully claim that he must be promoted. His claim is then based on the statutory rule which creates the right i.e. the rule that longest in service is automatically awarded the promotion. ( See Leonard D. White's Study of Public Administration, 4th Edition quoted in Sant Ram Sharma v. State of Rajasthan. ). The rules or norms almost invariably preserve employer's prerogative of choice and therefore it is invariably said, as noted above, that employee has only a right to be considered and not right to be promoted. (See T.R. Kapoor v. State of Haryana ).

7. In State of Bihar v Bateshwar Sharma, , the Apex Court held that once DPC held that an employee was unfit for promotion up to a date, the only course that is required to be adopted by the High Court is to remit the matter to the Govt for constitution of the DPC to consider the employee's fitness for promotion in the later period. DPC would go into the merits afresh and find out whether the employee would be fit for promotion. If the DPC recommends him fit for promotion, the Govt would appoint him on regular promotion and he would get seniority only from the date of his promotion. DPC is the only competent authority to decide the matter on merits. Direction given by the High Court to the effect that the concerned employee was to be deemed to have been promoted from the date with all consequential benefits was not sustainable. In FCI vs Suraj Bhan, 1995(4) SCC 446, it was held that even if departmental proceedings have been quashed the only further direction warranted in the facts and circumstances of the case, is that the concerned employee should be considered for promotion on the basis of the departmental proceedings being quashed in his favor. This is an exercise to be performed by the department and not by the Court. The department is required to consider the respondent for promotion not necessarily from the date mentioned in the High Court's order but from the date the department considers the employee entitled for such consideration. The date from which the concerned employee is entitled to be considered is not a matter for determination in the proceedings before the High Court.

8. In State of Mysore v. Syed Mohammod Ali, , the Apex Court set aside High Court's order directing promotion with retrospective effect. The Apex Court observed that High Court could only direct the state Government to perform its duty i.e. consider whether having regard to seniority and fitness the concerned employees should have been promoted. The principles were reiterated in State Bank of India v Mohd Mynuddin, . In State of Mysore v C.R. Seshadri, , it was observed that in our constitutional scheme, a broad threefold division exists. The power to promote an officer belongs to the Executive and the judicial power may control or review Government action but cannot extend to acting as if it were the Executive. The Court may issue directions but leave it to the Executive to carry it out. The judiciary cannot promote or demote officials but may demolish a bad order of government or order reconsideration on correct principles.

9. We find no substance in the plea of the plaintiff-respondent No.1 that the promotion was only on the basis of seniority. On the contrary, the resolution dated 27th October, 1978 on which the plaintiff-respondent No.1's case revolves reads as under :-

"The Committee decided that Managers drawing a basic salary Rs.710/- and with at least one year's service as Manager in the Bank be considered for position. For this purpose the rural Branch Managers were excluded for obvious reasons. They considered the names of 112 Manager fulfillling the above eligibility criteria. After thorough screening of bio data of these candidates and keeping in view suitability, educational qualifications, experience, past performance and service record, conduct, job knowledge and leadership skills etc. They recommended the following Managers for promotion."

10. The criteria for promotion essentially was as follows:-

(a) The employee should have completed one year service as Manager in the bank.

(b) Basic salary drawn by him should not be Rs.710/-; and

(c) that service as manager should not have been in rural branch.

After the aforesaid three conditions are satisfied the employee is entitled to be considered for the purpose of selection taking several other factors like suitability, experience, quality of leadership etc. Therefore fulfilllment of three basic requirements did not entail an automatic promotion. The requisite qualities like suitability, experience, leadership skill etc were to be considered on individual merit and not on the comparative basis with others. That being the position, the Courts below were not justified in holding that the plaintiff-respondent No.1 was entitled to be promoted automatically without undergoing any selection process and/or was to be promoted consequently to higher posts. The proper direction which could have been given was for consideration of the plaintiff-respondent No.1 in terms of selection in 1985. We accordingly set aside the judgments of the lower courts to that extent. We further direct that a Selection Committee shall be constituted to consider the plaintiff-respondent No.1 for promotion in terms of resolution dated 27.10.1978. Selection Committee which is to be constituted for that purpose should not contain any person who was of equal or lower in rank than the plaintiff-respondent No.1 at that point of time. The appellant-defendant No.1 Bank - shall ensure this.

11. Coming to the cross appeal filed by respondent No.1-plaintiff questioning confirmation of promotions in so far as it relates to some of the respondents, it is to be noted that all the successful candidates were not imp leaded as defendants. Learned counsel for the plaintiff- respondent No.1 submitted that so far as those who are not imp leaded, the plaintiff has no grievance. Others, who were permitted to appear at the interview, and were selected, were not eligible on the basis of 1978 guidelines, though they may have been eligible under the 1982 guidelines. It is case of the plaintiff that if these persons are excluded from the zone of consideration, his chance would become brighter because he would be considered with lesser number of persons. We find no substance in this plea. As indicated above, the question of promotion was not dependent on the assessment of comparative merit. It was gauzed individually. That being the position we find no merit in the cross-appeal. It is accordingly dismissed.

12. The appeal is allowed to the extent indicated and cross-appeal is dismissed. No costs.