IMPORTANT POINT
The eligibility criteria for promotion from MMGS II to MMGS III in State Bank of India is not violative of Article 14 of Constitution. However, but its implimentation in regard to writing of CR s and its consideration by Committee need modifications as directed by the Supreme Court.

Headnote:State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979-Rule 17-Promotion-Eligibility criteria under-Criteria that MMGS-II officers will be eligible for promotion to MMGS-III if they have completed two years of line assignment and two years rural-Semi-urban service-High Court struck it down as violative of Article 14-Appeal to Supreme Court-Whether the action taken by the appellant in making the officers who have not completed the required service of line-assignment and rural/semi-urban service and considering their case, found them fit and placed them in list B is violative of Article 14 ? (No) The procedure adopted by Bank is just, fair and reasonable (Para 11)-Policy adopted by Board is not violative of Article 14-But procedure of writing CR by officer of same rank-Is against natural justice-Mechanical adoption of CR s is illegal-Directions given-Appeals allowed accordingly.
       Held : It would appear that the confidential reports and character rolls are being prepared by the officers of the same rank in the same MMGS II working in the establishment department over the same cadre officers working elsewhere and the reporting officers are the same. Ms. Nisha is right and the High Court is well justified in holding that such a procedure is violative of the principles of natural justice. Therefore, they should be written by superior officer of high rank, who are such high rank officers is for the appellant to decide. The appellants have to prescribe the officer competent to write the confidentials. There should be another higher officer in rank above the officer who was written confidential report to review such report. The appointing authority or any equivalent officer would be competent to approve the confidential reports or character rolls. This procedures would be fair and reasonable. The reports thus written would form basis for consideration for promotion. The procedure presently adopted is clearly illegal, unfair and unjust. (Para 15)
       Held further : It would also appear from the record that the confidential reports submitted were adopted in toto by the Committee considering promotion without any cross verification from the character rolls or the record and independent assessment of merit and ability. That would also be clearly illegal. It would be desirable to prepare a columnar statement with all relevant columns. The C.Rs. and other relevant record should be preserved. The matters considered by the promotion committee should also be preserved. (Para 16)
       Held carefully : Accordingly, we hold that the High Court was not right in setting aside the promotions and giving directions to promote all the officers in list A and then to consider the officers in list B and then to go on doing the exercise as indicated in the order. The promotions made remain ad hoc pending regular consideration and promotion. The appellant is directed to identify the officers who have voluntarily did not opt to serve in the line assignment or rural/semi- urban service and then eliminate such officers for List B, and put them in list C . Thereafter, consider the officers within the zone of consideration of all the officers in List A and B together, who are eligible to be considered for promotion subject to other relevant criteria. Those found fit be promoted be put in List A and B respectively and take action thereon. (Para 17)
       Held finally : The appeals are accordingly allowed and the orders of the High Court are set aside. The appellant should consider the case of all the officers in accordance with law now laid down. (Para 18)

ORDER

These appeals by special leave arise from the orders of the Division Bench of the Madhya Pradesh High Court made on August 27, 1993 in Misc. Petition Nos. 1965/90 and 2091/90. The facts not in dispute are that the respondents while working as Middle Management Grade Scale II officers (for short, "MMGS-II") in the State Bank of India, its Bhopal Circle have challenged the policy of the appellant-Bank dated March 21, 1990 and August 6, 1990 whereunder the officers who have not completed two years of line assignment and two years Rural/Semi-urban service were to be considered eligible for promotion to Middle Management Grade Scale III (for short, "MMGS-III"). The High Court has held that they are ineligible and such a clubbing of ineligible officers with eligible officers is violative of Article 14 and accordingly struck down the criteria and given directions in the order. Calling in question of the said order, these appeals by special leave came to be filed.

2. The Preamble of the State Bank of India, Act 23 of 1955 (for short, the "Act") envisages establishment of the State Bank of India (for short, the "Bank") for extending banking facility on a large scale more particularly in the rural/semi urban area and for diverse other public purposes. Section 43(1) of the Act gives power to the Bank to appoint such number of officers, advisers or employees as it considers necessary or desirable for the efficient performance of its functions and to determine the terms and conditions of their appointment and service. Regulation 55 of the State Bank of India General Regulations (for short, the "Regulations") provide the power of the Local Board in respect of the staff. Regulation 55(2)(a) envisages that appointing and/or promoting authority for various categories/Grades of officers and employees shall be such as the Executive Committee may by general or special order designate from time to time. The operation of the Bank is regulated by the Board of Managing Directors of the Bank which empowers appointment of the Committee. The Managing Committee consists of the Chief General Manager and such of the officers designated thereunder. It would appear that the Board or Managing Committee issues policy directions from time to time. The State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979 (for short, the "Rules") was made in exercise of the aforesaid power under Section 43(1). Rule 17 provides procedure for promotion. It envisages that :

"Promotions to all grades of officers in the Bank shall be made in accordance with the policy laid down by the Central Board or the Executive Committee from time to time.

Explanation : For the avoidance of doubts, it is clarified that the provisions of this paragraph shall also apply to promotions of any category of employees to the junior management grade."

3. The Executive Committee issued circulars from time to time. In 1990, for promotion from MMGS-II to MMGS-III effective from August 1, 1986, the eligibility criteria laid down is as under :

"(a) The eligibility criteria will be reckoned with reference to a date of eligibility which will normally be Ist of August every year.

(b) 2 years service as MMGS-II and both parts of C.A.I.I.B.; or

3 years" service as MMGS-II and Part I of C.A.I.I.B.; or

5 years service as MMGS-II and no Part of the C.A.I.I.B.

Note : For the promotions effective from the year 1988 onwards, to become eligible for promotion to MMGS-III, an officer should have also completed 3 years stay in rural/semi-urban branch."

4. In 1990, by memo dated March 21, 1990 general guidelines for promotion to MMGS-III were envisaged which read as under :

"Line Assignment :

Satisfactory completion of Line assignment as Branch Manager or as Manager of a business division for a

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1996 Supreme(SC) 313

IMPORTANT POINT The eligibility criteria for promotion from MMGS II to MMGS III in State Bank of India is not violative of Article 14 of Constitution. However, but its implimentation in regard to writing of CR s and its consideration by Committee need modifications as directed by the Supreme Court.

Cases Referred (2)

IMPORTANT POINT
The eligibility criteria for promotion from MMGS II to MMGS III in State Bank of India is not violative of Article 14 of Constitution. However, but its implimentation in regard to writing of CR s and its consideration by Committee need modifications as directed by the Supreme Court.