Important Point
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.

Headnote:Regional Rural Banks (Appointment and Promotions of Officers and other Employees) Rules, 1988 -Rule 7-Seniority-cum-merit-Criterion prescribed for promotion to the post of Area Managers/Senior Managers in the Regional Banks under National Bank for Agricultural and Rural Development-Meaning-View of High Courts being: first the seniormost eligible employee has to be tested to find out whether he possesses the minimum required merit for holding the higher post and only if he is not found suitable or fit, his immediate junior may be tested for the purpose of promotion - Appeals to Supreme Court-Whether correct-
       Held : We 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 prescribed 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. (Para 18)
       We may now examine whether the aforesaid criterion has been correctly followed by the concerned Banks in making the impugned promotions. (Para 19)
       Held finally excepting Chhindwara-Seoul Kalleriya Gramin Bank in M.P. High Courts were right in other cases. All appeals dismissed except Civil Appeal arising out of S.L.P. (C) in said Bank, which was allowed. (Para 37)
       Accordingly held : In the result, Civil Appeal Nos. 3798 of 1996, 3809-3810 of 1996, 3799-3803 of 1996, 3811-3812 of 1996, 3804-3808 of 1996 and Civil Appeals arising out of Special Leave Petition (C) Nos. 17780-17781 of 1997 and 19965-19966 of 1997 are dismissed. Civil Appeal arising out of Special Leave Petition (C) No. 7321 of 1997 is allowed and the judgment of the Madhya Pradesh High Court dated February 7, 1997 in M.P. No. 1931 of 1993 is set aside and the said writ petition is dismissed. No order as to costs. (Para 38)

Judgment

S.C. Agrawal, J.-Leave granted in all Special Leave Petitions.

2. What is meant by “seniority-cum-merit”, the criterion prescribed for promotion to the post of Area Manager/Senior Manager in the Regional Rural Banks under the Regional Rural Banks (Appointment & Promotions of Officers and Other Employees) Rules, 1988 (hereinafter referred to as `the Rules’)? This is the common question which falls for consideration in these appeals.

3. The Regional Rural Banks have been established under the provisions of the Regional Rural Banks Act, 1976 (hereinafter referred to as ‘the Act’). Section 17 of the Act empowers a Regional Rural Bank to appoint such number of officers and other officers as it may consider necessary or desirable, in such manner as may be prescribed, for the efficient performance of its functions and to determine the terms and conditions of their appointment and service. Section 24 of the Act lays down that in the discharge of its functions a Regional Rural Bank shall be guided by such directions, in regard to matters of policy involving public interest, as the Central Government may, after consultation with the National Bank for Agricultural and Rural Development (hereinafter referred to as ‘the National Bank’), give. Under Section 29 of the Act the Central Government has been empowered to make Rules, after consultation with the National Bank and the sponsor Bank, for carrying out the provisions of the Act. By clause (ba) of sub-section (2) of Section 29, which was inserted by the Regional Rural Banks (Amendment) Act, 1987, the Central Government was empowered to make Rules relating to manner in which the officers and other employees of the Regional Rural Banks shall be appointed. In exercise of the powers conferred under Section 29 read with Section 17 of the Act the Central Government framed the Rules which were published vide Notification dated September 28, 1988.

4. Rule 3 of the Rules provides that the Board of Directors of each Regional Rural Bank may, in consultation with its sponsor Bank, create such number of posts as are specified in the Second Schedule to the Rules from time to time. Rule 4 prescribes that the Board of Directors may, in consultation with the sponsor Bank, determine the number of vacancies in each post keeping in view the guidelines issued by the Central Government from time to time. Rule 5 makes provision for filling of vacancies and provides that all vacancies determined under Rule 4 by the Board of Directors shall be filled by deputation, promotion or direct recruitment in accordance with the provisions contained in the Second Schedule to the Rules. With regard the post of Area/Senior Manager the following provision is made in the Second Schedule to the Rules :-

“7. Area Managers of Senior Managers

(a)Source of Recruitment :

Hundred per cent by promotion from amongst confirmed officers working in the bank. Promotions will be on the basis of seniority-cum-merit. If suitable officers are not available internally, these posts could be filled by taking temporarily officers of the sponsor banks and other banks or organisations on deputation.

(b)Qualifications and Eligibility :

(i)A Graduate of recognised University or any equivalent qualifications recognised as such by Government of India, preference being given to Agriculture or Commerce or Economic Graduates.

(ii)Eight years service as an officer in the regional rural bank concerned. Provided that the Board may, with the prior approval of National Bank, relax the period of service by a period not exceeding two years, if suitable candidates of requisite experience are not available.

Note : The post of Area Managers and Senior Managers will be equivalent in rank and will be interchangeable.

(c)Mode of Selection :

Interview and assessment of performance reports for the preceding three years period as officer for promotion.”

5. Prior to the making of the Rules appointment on the post of Area/Senior Manager in Regional Rural Banks was g

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1998 Supreme(SC) 658

Cases Referred (6)