Gail Officers' Association ... vs Union Of India (Uoi) And Ors.
2004 Latest Caselaw 403 Del

JUDGMENT

Pradeep Nandrajog, J.

1. Petitioner, an association of the officers working in Gas Authority of India Ltd. (GAIL) has filed the present petition praying:

"(i) Direct the respondent No. 1 to initiate action/seek explanation against respondent No. 2 and direct him to implement the agreement/memorandum of understanding dated 10.1.2003 signed with the petitioner's association in letter and spirit.

(ii)   Quash the decision dated 20.6.2003 of the    Board of Directors of respondent No. 2, giving effect to the fast track promotion to the select

few executives of the respondent No. 2, in absolute disregard of the Agreement/MOU dated 10.1.2003.
 

(iii) Direct the respondent No. 2, to refrain from transferring the office bearers of the petitioner association on flimsy grounds in absence of any transfer policy, quash all such transfers and direct them to draft a Transfer Policy in consultation with the petitioners association.

(iv) Pass order or further order, as this Hon'ble Court; may deem fit and proper in the facts and circumstances of the case."

2. During the arguments prayer 3 was given up and Counsel for the petitioner made submissions pertaining to prayers 1 and 2 above.

3. Case of the petitioner is that Gas Authority of India Ltd. (GAIL) had a promotion policy which was resulting in a heart burning amongst the officers.There was a great degree of unhappiness all around. This got accentuated with thedeclaration of promotions pursuant to the DPC held in the year 2000. Petitioneranalysed the problem. Analysis of the problem revealed that the primary factordetermining promotions was the ACRs of the officers. These ACRs were resultingin aberrations. Association noted that the ratings were based more on personal relations, servility towards boss and regional bias. Petitioner association took up the issue with the management. After deliberations with the management, the CMD of the Company announced that the job of reforming the performance appraisal system would be given to a consultant, who, in consultation with the management and the association would evolve a mutually acceptable performance system. This finalisation of performance appraisal postponed promotions which had to be effected in the year 2001.

4. M/s. M.B. Athreya was appointed as the consultant by the management ofits own and based on its recommendations promotion policy was revised in the year 2002. As per the revised promotion policy eligibility of all officers above grades E-2 stood increased from 3 to 4 years. This was done because according to the management the top was getting too heavy.

5. As per the new promotion policy, an officer who is aggrieved by his non-promotion could seek review.

6. Since no promotions were effected in the year 2001 as the ACR appraisal and promotion policy was under the consideration, DPC met in the year 2002 and declared the promotions.

7. Petitioner alleges that the promotions effected were arbitrary. This caused resentment amongst the officers. Protest meetings were held. A peaceful protest was also held by the officers. To counter this, petitioner alleges that the management launched an unilateral opinion poll. The petitioner retaliated by issuing a strike notice. The Labour Commissioner intervened. A meeting was held on 10.1.2003 in which the management agreed to review the promotion scheme. Petitioner alleges that one of the offending clauses in the new promotion policy to effect fast track promotion was specifically agreed to be reviewed. Petitioner further alleges that the proforma, as per which the personal appraisal and development rating was to be determined was also, agreed to be reviewed. Decision was subsequently ignored.

8. Another grievance of the petitioner related to circular dated 7.1.2003 issued by the management which directed that not too many officers should be given higher rating. According to the petitioner there was no justification to place a ceiling on higher rating. Justification of the respondent was that while rating officers, higher standards should be put and one of the method of attaining higher standard was to put a ceiling on higher rating. Besides it would restrict officers being eligible for fast track promotion. Petitioner responded by stating that this would debar reporting officers from making a free assessment.

9. Petitioner alleges that pursuant to the decision taken between the management and the association on 10.1.2003 a sub-group was constituted. Meetings were held but before anything could be concretised, the management proceeded ahead to effect promotions in the year 2003 as well. The association filed a writ petition being WP(C) No. 22240/2003 in the High Court of Chennai which is stated to be pending.

10. Petitioner alleges that the methodology adopted by the departmental promotion committees was not being disclosed and request of the petitioner to review cases wherein officers have been dropped repeatedly without an apparent reason was not been acceded to. Petitioner states that the new ACR format has no provision for feed-back to the officer.

11. Stating the facts aforesaid present petition has been filed seeking relief as noted in para 1 above.

12. Response of the respondent is that promotion to a high level/grade is not a matter of right. An employee has a right to be considered for promotion. It is the absolute discretion of the management to determine the eligibility criteria and frame the promotion policy based on the requirement of the employer. At the executive, level merit alone was of consequence while effecting promotion.

13. Justifying the promotion policy it was stated that even in the past, outstanding officers were being given out of turn promotion and therefore it could not be said that the management was introducing fast track promotion for the first time. The promotion policy on this issue was justified by stating that it was provided in the policy that officers who had obtained 'outstanding' rating in their ACRs in the last 3 years consecutively were eligible to be considered for promotion in 3 years as against 4 years for others. It was contended that this clause in the promotion policy could not be said to be arbitrary or irrational. Proforma of the performance appraisal which would result in recording of the ACRs was justified by stating that greater transparency was introduced as a result of the new promotion policy which required a different method of recording the ACRs. It was stated that performance appraisal as introduced was, what is called in the industry a '360 degree feed-back'. It was contended that the grievance of the officers in the past was that while recording the ACRs, the senior officers could rate their juniors guided by their personal relationships and to over come the said grievance a better recording system was evolved. It was stated that the management consulted the officers and took into account their wishes while fixing the parameters in the performance appraisal proformas. It was stated that on a particular issue the views of the office bearers of the association need not necessarily represent the views of the majority of the members and therefore the management decide to elicit the views of individual officers of GAIL by conducting an opinion poll. It was stated by the respondent that save and accept a challenge predicated on the vice of unconstitutionality, reasonableness or unreasonableness of a promotion policy or of the ACR ratings could not be gone into by a Court.

14. During arguments, Counsel for the respondent contended that individual grievances pertaining to promotion could always be raised by an officer. Such a challenge had to be made on the basis of specific facts pleaded and if established and a case made out, appropriate relief could always be granted by the Court.

15. To understand and appreciate as to what has been done by the respondent the old and the new promotion policy needs to be noted at the first instance.

16. It is of interest to note that the officers of GAIL had been making a grievance that the existing promotion policy which had an element of interview was resulting in the blue-eyed boys of the management being promoted. The management, with a view to remove any misgivings on this issue agrees to change the promotion policy.

17. The previous promotion policy would reveal that in the executive grades, promotion was being effected by following the marking system in which following marks were assigned:

 Qualifications      ..... 20 marks
Experience          ..... 20 marks
ACRs                ..... 40 marks
Performance at      ..... 20 marks
DPC at interview
Total               ..... 100 marks

 

18. As per the new promotion policy, for promotion in the executive grade the marking system is as under:
 Qualifications       ..... 20 marks
Experience           ..... 20 marks
Performance          ..... 40 marks
rating
DPC Modulation       ..... 20 marks

 

19. DPC Modulation would assign the marks as per the following criteria:
  

5 marks to be awarded on the basis of difficult location posting; 1 mark for service in A category location; 0.5 mark in B category location and 0 mark for service in C category location, for each completed year of service. 15 marks would be allocated in DPC modulation taking into account;

1. Varied experience;

2. Manning/Future Project Requirements;

3. Organisational Requirement;

4. Potential for Growth;

5. Leadership Qualities;

6. 360 degree feed-back.

20. Perusal of the criteria for promotion as per the new promotion policy would reveal that 20 marks which were previously assigned to interviews have been done away with. These 20 marks have now been assigned to DPC modulation. DPC modulation, noted above, shows that allocation of marks have been made completely transparent. I see no reason for anyone to have any grievance on this score.

21. It is a classic case of a person not being happy with any system. Previously, officers had a grievance that interviews were substantive and blue-eyed boys were being favored. To dispel any misgivings, the management has introduced a transparent system, 20 marks assigned to an interview had been replaced with DPC modulation, a completely transparent system of awarding marks.

22. The new criteria for promotion require, as noted above, change over to DPC modulation, which in turn required modulation to be effect on 6 parameters noted above. This required a different method of generating data for rating of an officer. It is called a 360 degree feed back appraisal system.

23. One of the grievance of the petitioner was that past practice of recording ACRs, where the senior would record ACR was not only non-transparent but would encourage nepotism and sycophancy as seniors would require juniors to be servile and juniors who had to be rated in the ACR by their seniors had no option but to go along with the wishes of the senior. Indeed, there is a great degree of unhappiness with performance appraisals in every organisation. Rarely does one come across a person who is happy with what he is rated at. The general complaint is that the superior officers do not understanding the constraint under which the juniors were working. Another grievance raised is that appraisal forms are filled up ritualistically and secretly without the employee knowing as to what factor has influenced his rating. Another grievance is that some officers are liberal while others are strict.

24. The objective of every appraisal system is to control the behavior of the employees by using it as an instrument for rewards and punishment; to make decisions regarding promotions; to place the right people at the right place; and to identify the training and developmental needs of the employees.

25. Objective data has to be gathered for making appraisals. The appraisal data must pertain to standard dimensions like honesty, sincerity, drive, job knowledge, dependability and leadership to be known about an individual.

26. The nature of the performance appraisal and its effectiveness depends, a great deal, on how human resources are viewed and treated in an organisation. Many organisations unfortunately, in my opinion, appraise performances on trait which appraisal has serious limitations. It neglects the review on direct job related dimensions. Secondly, some characteristics take a long time to be developed and year after year, unless something is done, the employee may keep on showing the same behavior. As per necessity he gets similar ratings.

27. Hughes Software Systems, in the United States of America noted that many a person tends to remain focused on growing technically rather than growing as leaders. It noted that there was a need to consistently develop, reinforce and evolve a new method of appraisal. The Leadership Development Inventory (LDI) was invented to address this challenge.

28. LDI is nothing but a 360 degree inventory. The key feature of LDI is a means of providing the incumbent consolidated, confidential feed back along with his/her behavior from not only the superiors but also the peers and the subordinates. It is pro-active and synergetically links the process and the system with the persons who man the processes and the systems. Today, the 360 degree feed-back performance appraisal system is being universally effected in the trade and industry.

29. What is relevant for the purposes of the present decision is that the management has introduced a universally accepted appraisal system. It has not created something at its ipsi dixit. That would be the end of judicial review. This Court is not to go into the merits and demerits of the appraisal form. Once a scientifically accepted norm is identified, jurisdiction of the Court to further pry into the matter would come to an end.

30. As noted above in the previous promotion policy qualifications and experience had 20 marks each. They continue to be the same under the new promotion policy. ACR ratings has 40 marks in the new promotion policy, the same as in past. In the previous promotion policy 20 marks were allocated for interview. Under the new promotion policy these 20 marks have been assigned to DPC modulation. As noted above DPC modulation is transparent and is much better, in that has less subjectivity or for that matter not subjectivity at all vis-a-vis an interview.

31. A perusal of the new performance appraisal form would reveal that it consists of 7 parts. Part-I is clerical, in that, contains particulars of the candidate. Part-II is the self-assessment to be filled by the candidates himself. Part III has to be filled by the reporting officer. Here, the performances potential and integrity of the officer are rated. Comments have to be filled in by the reporting officer. Part IV, which has to be filled by the reporting officer lists the overall grading. Part V consists of adverse entries, if any, and requires the same to be communicated to the officer. Part VI pertains to the training and development needs of the officer to be filled by the reporting officer. Part VII consists of updation which has to be filled by the officer concerned. The appraisal form would show that 'feed-back and counselling' has to be filled up. This feed-back and counselling and other related matters which have to be filled as per the new appraisal form requires information from the subordinates, peers and superior officers. A complete 360 degree method of appraisal had been stipulated. The appraisal form would show that the grievance of the past that superior officers would fill up the forms and since these appraisal forms would make or mar the carrier of the subordinates, sycophancy and servility was being built in the system stand obviated. As per new proforma seniors would not be able to rate juniors contrary to what the junior actually is. Incongruity or contradictions in the rating by peers and subordinates of the officers vis-a-vis the rating by the boss would come to light.

32. I find nothing unconstitutional in the new promotion policy pertaining to the criteria for promotion as adopted. I find nothing unconstitutional in the ACR proformas.

33. Grievance was raised pertaining to fast track promotion. It was not disputed that even in the past, fast track promotion was being effected. Indeed Shri S.K. Tikku, the General Secretary of the petitioner association, is a beneficiary of one such promotion in his favor in the year 1992. What then is the grievance?

34. Grievance raised was that eligibility for promotion, as per the promotion policy, was 4 years experience in the lower grade. By making persons who were rated as 'outstanding' being eligible for promotion in 3 years, blue eyed boys would be promoted, which would result in stagnation, in that, promotions would be taken away by the chosen view.

35. We are living in a highly competitive world. Excel or perish is the new mantra in the world of trade and business. Merit has to be recognised. The new promotion policy in class 3 stipulates as under:

  

"NORMS FOR PROMOTION
 

3.1 Eligibility Period
 

3.1.1        Executives will be eligible for consideration for promotion from the existing grade to the next higher grade only on completion of a minimum length of service, termed as 'Eligibility Period' as follows;
 E-1 to E-2              :   5 years
E-2 to E-3 and above    :   4 years

 

3.1.2       Promotions to executive levels up to E-4 shall be based on percentage norms, beyond which these will be vacancy based.
 

3.1.3 With a view to suitably rewarding and recognising executives who are consistently outstanding in their performance, executives in the level of E-2 and above shall be considered for promotion under the Scheme of 'Green Ribbon' (Fast Trackers). Executives assessed as 'Outstanding' in the preceding three consecutive years, will be qualified as 'Green Ribbon' (Fast Trackers) and will be considered for promotion with eligibility one year less than the prescribed eligibility period for the relevant grade. This will be adopted from DPC 2003 onwards through a process of 'Assessment Centres'."

36. Clause 3.1.3, with a view to suitably reward and recognised executives who are consistently outstanding, makes them qualified for being considered, for promotion if they are assessed as outstanding in the preceding 3 consecutive years.

37. The management has set a strict criteria for fast trackers. It is outstanding assessment, consecutively attained thrice in succession. The effect is that these outstanding and brilliant persons become eligible for promotion one year in advance. What is arbitrary or unconstitutional about it? I find nothing. Executives form a class by themselves. They are the power house of a company. They drive the company. Meritorious have to be identified and rewarded. Incentive pushes everyone forward. In the private sector no one can question any ones promotion. Anyone who performs is rewarded. The public sector has also to compete with the private sector. Way back in the year 1987, the Supreme Court had noted that the time had come when the public sector, pertaining to the managerial cadre should be unshackled from the rigours of law pertaining to service jurisprudence. Following was observed in the decision reported as , O.P. Bhandari v. ITDC;

"As the occasion so demands, we feel constrained to place in focus and highlight an important dimension of the matter. The impugned regulation is extremely wide in its coverage in the sense that it embraces the 'blue collar' workmen, the 'white collar' employees, as also the 'gold collar' (managerial cadre) employees of the Undertaking. Insofar as the 'blue collar' and 'white collar' employees are concerned, the quashing does not post any problem. Insofar as the 'gold collar' (managerial cadre) employees are concerned, the consequence of quashing of the regulation calls for some reflection. In the private sector, the managerial cadre of employees is altogether excluded from the purview of the Industrial Disputes Act and similar labour legislations. The private sector can cut the dead wood and can get rid of a managerial cadre employee in case he is considered to be wanting in performance or in integrity. Not so the public sector under a rule similar to the impugned rule, Public sector undertakings may under the circumstances be exposed to irreversible damage at the hands of a 'gold collar' employee (belonging to a high managerial cadre) on account of the faulty policy decisions or on account of lack of efficiency or probity of such an employee. The very existence of the undertaking may be endangered beyond recall. Neither the capitalist world nor the communist world (where an employee has to face a death sentence if a charge of corruption is established) feels handicapped or helpless and countenances such a situation. Not being able to perform as per expectation or failure to rise to the expectations or failure to measure up to the demands of the office is not misconduct. Such an employee cannot thus be replaced at all. If this situation were to be tolerated by an undertaking merely because it belongs to the public sector, it would be most unfortunate not only for the undertaking but also for the Nation. The public sector is perched on the commanding heights of the National Economy. Failure of the public sector might well wreck the National Economy. On the other hand the success of the public sector means prosperity for the collective community (and not for an individual Industrial House). The profits it makes in one unit can enable it to run a losing unit, as also to develop or expand the existing units, and start new units, so as to generate more employment and produce more goods and services for the community. The public sector need not therefore be encumbered with unnecessary shackles or made lame. It is wondered whether such a situation can be remedied by enacting a regulation permitting the termination of the employment of employee belonging to higher managerial cadre, if the undertaking has reason to believe, that his performance is unsatisfactory or inadequate, or there is a bona fide suspicion about his integrity, these being factors which cannot be called into aid to subject him to a disciplinary proceeding. If termination is made, under such a rule or regulation, perhaps it may not attract the vice of arbitrariness or discrimination condemned by Articles 14 and 16(1) of the Constitution of India, inasmuch as the factor operating in the case of such an employee will place him in a class by himself and the classification would have sufficient nexus with the object sought to be achieved. Of course it is for the concerned authorities to tackle the sensitive problem after due deliberation. We need say no more."

38. Interestingly, petitioner made an argument that the management had simultaneously issued an office order directing that a ceiling be effected in the number of executives who are rated outstanding. It would be sufficient to note that by placing a ceiling on the percentage of officers who could be rated as outstanding, the management has ensured that all vacancies be not filled by fast track promotion. As noted, one of the grievance of the petitioners was that all vacancies could be filled up under the new policy by the fast trackers. This possibility has been addressed by the management by placing the ceiling. This aspect of the matter again shows that the petitioner, without application of mind is just interested in raising an issue for the sake of raising an issue. On the one hand a grievance is raised that under fast track promotion policy, all vacancies would be eaten away by fast trackers and at the same time decision of the management to put a cap on those who could qualify to be fast trackers is being questioned as encumbering the discretion of the officers to rate their subordinates.

39. The grievance of the petitioners that by putting a ceiling on outstanding grading, independence of the reporting officers was being curtailed is neither here not there. There is nothing objectionable in the management being strict in rating, in that, by directing that only 10-15 officers would be rated as outstanding. It is not only good for competition but as noted above, would result in less number of candidates being rated as outstanding and hence eligible for fast track promotion. Indeed, this would result in not all promotional posts being eaten away by fast trackers.

40. Tested on the anvil of recognised principles of law that a Court in judicial review, pertaining to an executive decision would not quash the same unless it offends the Constitution of India or is unreasonable, unreasonableness being as per "Wednesbury's" principles 1947 (2) All.E.R. 680 and nothing offensive and objectionable being found by me, the rule is discharged.

41. Writ petition is dismissed with costs in the sum of Rs. 15000/- imposed upon the petitioner and awarded in favor of the respondent No. 2.

Writ Petition dismissed with costs of Rs. 15,000/-.