P.K. Biswas vs Union Of India (Uoi) And Ors.
2007 Latest Caselaw 1868 Del

JUDGMENT

Mukundakam Sharma, C.J.

1. This appeal revolves around the issue of appointment of a Deputy Governor in the Reserve Bank of India. The appellant and the respondent No.3 were working as Executive Directors with the Reserve Bank of India. The appellant is senior to respondent No.3, though both are designated as Executive Director, as he was appointed a month earlier than the respondent No.3. The grievance of the appellant is that the respondent No.3 has been appointed as a Deputy Governor from the position of Executive Director, although he was senior to respondent No.3 but his case was ignored and he was not considered for promotion.

2. The appellant being aggrieved filed a writ petition. The said writ petition was heard by the learned Single Judge but the same was dismissed holding that the contentions raised by the appellant are baseless and have no merit. It was also held that the post of Deputy Governor in the Reserve Bank of India is not a promotional post.

3. Being aggrieved by the aforesaid order passed by the learned Single Judge, the present appeal was filed. One of the reliefs that was sought for in the writ petition was that the order of promotion made in the case of respondent No.3 should be set aside and quashed and that appropriate guidelines should be issued laying down the criteria for promotion and stipulating norms for considering the cases of eligible candidates for promotion to the post of Deputy Governor.

4. In order to appreciate the aforesaid contentions, it would be relevant to quote hereunder the provisions regarding appointment of the Deputy Governor, as appearing in Sections 8(1)(a) and Section 8(4) of the Reserve Bank of India Act, 1934.

8. Composition of the Central Board, and term of office of Directors.__

(1) The Central Board shall consist of the following Directors, namely__

(a) a Governor and not more than four Deputy Governors to be appointed by the Central Government;

(b) ...

(c) ...

(d) ...

(2) ...

(3) ...

(4)The Governor and a Deputy Governor shall hold office for such term not exceeding five years as the Central Government may fix when appointing them, and shall be eligible for re-appointment.

A Director nominated under Clause (c) of Sub-section (1) shall hold office for a period of four years and thereafter until his successor shall have been nominated.

A Director nominated under Clause (d) of Sub-section (1) shall hold office during the pleasure of the Central Government.

5. Section 2(b) of the Reserve Bank of India Act reads as under:

2. Definitions. - In this Act, unless there is anything repugnant in the subject or context, -

(aii) ...

(aiii) ...

(b) "the Central Board" means the Central Board of Directors of the bank;

6. Counsel appearing for the appellant submitted before us that there is no criteria or guidelines provided either in Section 8 or under any other provision of the Act laying down the criteria and norms for giving promotion to the post of Deputy Governor. According to him, the only criteria, which is provided in the Act is that the Deputy Governor is to be appointed by the Central Government and that the period of service of such Deputy Governor would be for a term not exceeding five years as the Central Government may fix when appointing such Deputy Governor and that he would also be eligible for re-appointment. Counsel appearing for the appellant also referred to the provisions of Section 7, 30 and 58(1) of the Reserve Bank of India Act. Relying on the said provisions, it was submitted before us by the counsel appearing for the appellant that despite the aforesaid provisions no guideline has been framed either by the Central Government or by the "Central Board" laying down the criteria and norms to be considered for promotion. It was also submitted by him that the appellant was the senior most Executive Director of the Reserve Bank and, therefore, non-consideration of his case by the competent authority while considering cases for promotion to the post of Deputy Governor is illegal and arbitrary. Another contention that was raised was that he being the senior most Executive Director, he should have been given preference over respondent No.3, as the appellant did not have any adverse remark communicated to him at any point of time during his service tenure. Next submission that was made was that the Governor of Reserve Bank in the communication sent by him to the Central Government had adversely commented about the appellant, which was violative of the principles of natural justice. It was also submitted that the said post is a promotional post and, therefore, consideration should have been based only on the seniority and, therefore, reference made to the performance of the appellant by the Reserve Bank of India was illegal and without jurisdiction.

7. In the light of the aforesaid submissions made before us, we have perused the records and now we proceed to dispose of this appeal in the terms of discussions made hereinafter.

8. On completion of the term of appointment by Smt. K.J. Udeshi, Deputy Governor effective from 12th October, 2005, a post of Deputy Governor fell vacant. In order to fill up the said vacancy, the Governor of the Reserve Bank initiated the process. A letter was written by him on 27th August, 2005 to the Secretary, Department of Economic Affairs, Ministry of Finance stating that the aforesaid vacancy in the post of Deputy Governor is falling vacant effective from 12th October, 2005. It was also mentioned therein that Smt. K.J. Udeshi was elevated as Deputy Governor from the position of Executive Director and, therefore, an initial search for her successor should be from amongst the Executive Directors working in the Reserve Bank of India. In paragraph 3 of the said letter, it was mentioned by him that the Executive Directors in the order of seniority are the appellant, respondent No.3 and Shri. A.V. Sardesai (who was retiring in end of September, 2005). So far as the appellant is concerned, it was mentioned in the said letter that he had inter-personal problems in recent years resulting in frequent transfers as Chief General Manager and that though opportunity was afforded to him as Executive Director, but his performance had been consistently below par and that his interpersonal and public-relations continued to be somewhat wanting and, therefore, it might be risky to elevate him as Deputy Governor. It was further mentioned in the said letter that respondent No.3 had considerable strengths in economics and that she had headed sensitive departments and also provided consultancy services on financial markets to other countries and consequently in view of her background, experience and performance, she was the most suited to succeed Smt. K.J. Udeshi. After making reference as aforesaid the Governor of the Reserve Bank submitted the said proposal contending that Smt. Usha Thorat, the respondent No.3, be appointed as Deputy Governor for a period of five years from the date of taking over charge or till she attains the age of 62 years whichever was earlier.

9. After the aforesaid letter was received initiating the proposal for filling up the post of Deputy Governor falling vacant on completion of the term of appointment of Smt.K.J. Udeshi, the same was considered by the Department of Economic Affairs, who agreed with the proposal and sought the approval of the Appointments Committee of the Cabinet (ACC) for appointment of Smt. Usha Thorat as Deputy Governor, Reserve Bank of India for a period of five years from the date of her taking over charge or till she attains the age of 62 years, whichever was earlier.

10. Consequent thereto a note for the Appointments Committee of the Cabinet was prepared mentioning therein that the recommendation of the Governor, Reserve Bank in respect of respondent No.3 had been considered in the Department of Economic Affairs and that it had been proposed to appoint her in the post of Deputy Governor in the Reserve Bank of India. The aforesaid proposal of the Banking Division of the Department of Economic Affairs for appointing respondent No.3 as the Deputy Governor was approved by the Cabinet Secretary. Thereafter the relevant file was put up with the Home Minister, who approved the proposal of the Cabinet Secretary and thereafter the same was put up before the Prime Minister, who also approved the aforesaid proposal. Consequent thereto, the respondent No.3 was appointed as the Deputy Governor of Reserve Bank of India.

11. As provided under Section 8 of the RBI Act, Deputy Governor is to be appointed by the Central Government. It is also provided therein that the maximum term for a Deputy Governor would not exceed a period of five years provided the Central Government may fix a lower period of service when appointing a Deputy Governor. It also transpires from the records that some time earlier, while approving a proposal for appointment of another Deputy Governor, Appointments Committee of the Cabinet allowed the incumbent to serve up to 62 years of age. Consequently in the order passed appointing the respondent No.3 as Deputy Governor, it was mentioned that she may be appointed for a period of five years from the date of her taking over charge or till she attains the age of 62 years, whichever is earlier. In the Act wherein composition of the Central Board, and term of office of Directors is provided, no such provision of maximum age being 62 years has been mentioned. The same appears to have become an accepted practice pursuant to a decision of the Appointments Committee of the Cabinet to allow an incumbent to serve up to the age of 62 years or for five years, whichever is earlier.

12. On going through the note sheet, which throws light to the process adopted for filling up / appointment to the post of Deputy Governor, we find that an order has already been passed for preparing guidelines containing criteria and norms to be followed for making appointment to the post of Deputy Governor. The ACC has accepted the aforesaid proposal, which would mean that now a guideline would and should be prepared by the concerned Ministry providing for and regulating the criteria and norms for consideration of the names of the eligible candidates for the post of Deputy Governor.

13. We expect and feel that such guidelines should be prepared laying down the norms and criteria for consideration of the eligible candidates for being appointed as the Deputy Governor and also providing for the manner in which such appointment is to be made.

14. On going through the records, we find that while initiating the proposal for appointment, names of four persons were considered. Out of the aforesaid, the names of the appellant, respondent No.3 and one Shri. A.V. Sardesai were finally considered taking into consideration their suitability and performance. On making a comparative assessment of their performance, the Governor of Reserve Bank recommended the name of the respondent No.3 for such appointment as according to him, she was the most suitable candidate for being appointed as the Deputy Governor. The concerned Ministry approved the aforesaid proposal, which was later on placed before the Appointments Committee of the Cabinet, which also approved the aforesaid proposal.

15. It is, therefore, crystal clear that the process of appointment to the post of Deputy Governor has gone through the approved and appropriate channel till it reached the Appointments Committee of the Cabinet. The said proposal having been accepted finally by ACC and appointment having been made pursuant thereto, it cannot be said that the aforesaid appointment is in any manner arbitrary or without jurisdiction. The case of the appellant was also considered and he was found not suitable. Therefore, there cannot be any grievance of the appellant to the aforesaid extent. It also cannot be said that the post of Deputy Governor is a promotional post, which fact is established from a bare reading of the provisions of Section 8 of the RBI Act. It is a Board level appointment and it is clearly established from the provisions of Section 8 that it is not a promotional post but is an appointment to be made by the Central Government for a term not exceeding five years.

16. In the facts and circumstances of the case, we are not inclined to hold that there is any violation of the principles of natural justice. The said principles are not applicable and cannot be applied for being appointed to a post of Dy. Governor. Necessarily when making a recommendation and initiating a proposal for appointment, the Governor of Reserve Bank has to make a comparative assessment of suitability and performance of all the eligible candidates. In the present case also he had made a comparative assessment of the candidates and sent the same to the Central Government with his comments. While making his comments regarding the comparative merit and suitability, the Governor of the Reserve Bank of India is entitled to make his own comments and express his views. The matter of appointment and suitability has been examined at the highest level and on being satisfied appointment of the respondent No.3 has been approved. In our considered opinion, at that stage there was no necessity for giving any opportunity of hearing to the appellant. Therefore, the submission that there was violation of the principles of natural justice is without any basis and is rejected.

17. Accordingly, we find no merit in this appeal and the same is dismissed.