JUDGMENT

KULDIP SINGH J. : - The Board of Directors (the Board) of the Andhra Pradesh State Financial Corporation (the Corporation), on August 24, 1987, approved the promotion criteria in respect of various posts in the service of the Corporation. Thereafter, Office Memorandum dated September 1, 1987 containing the said criteria was issued. In these appeals, we are concerned with the promotions made to the posts of Manager and above. The Office Memorandum indicated the following criteria for promotion to the post of Manager and above : -

"I A minimum service of 3 years is required to become eligible for promotion to the next higher cadre.

2. The weightages attached to various criteria for considering merit promotions to various cadre personnel is as follows :

Additional qualifications 10%

Length of service in the cadre 15%

3 to 4 years 71/4 %

4 to 5 years 10 1/4%

5 years and above 15%

Performance appraisal 50%

Interview 25%

2. Regarding the performance appraisal, having weightage of 50% marks, the Board, in its meeting dated August 24, 1987 resolved as under :-

"FURTHER RESOLVED THAT THE existing confidential reports shall be continued up to the level of Asstt. Managers. For Deputy Managers and above, performance appraisal based on self-appraisal reports in the format indicated in the Memorandum shall be introduced prospectively.

FURTHER RESOLVED that at the time of considering promotions, the performance/ Confidential Reports of the preceding 3 years should be taken into account."

3. Performance appraisal was included as one of the criterion for promotion by the Board for the first time. The Confidential Reports are based on the assessment of a single superior officer whereas the method of performance appraisal is based on the self appraisal by the officer concerned. It is a method where the employee is asked to give, in his own words, his strong points, weak points and constraints faced by him in the service. The self-appraisal is then considered by the reporting officer who gives his remarks. Finally the higher reviewing authority decides the assessment by weighing both the employees self-appraisal and the remarks given by the reporting officer. According to the Board, the method of performance appraisal based on self-appraisal was an improvement on the method of assessment by Confidential Reports. keeping in view the procedure involved in the performance appraisal system the Board in its resolution, quote above, decided to introduce the said system prospectively. For the selection in hand it was decided to assess the performance on the basis of Confidential Reports for the preceding three years.

4. Promotions made to the posts of manager and above by the orders dated January 7, 1988 and February 1, 1988 were challenged by way of writ petitions before the Andhra pradesh High Court by those who were not selected. A learned single Judge of the High Court came to the conclusion that the allotment of 50% marks to performance appraisal under the new promotion policy was on the higher side, assigning 15% marks for seniority to a person who has served for five years and above was palpable low and allocating 25% marks for the interview was on the higher side. On these findings, the learned single Judge allowed the writ petitions and quashed the selection and the appointments made by the Board. Writ appeals filed by the Corporation were heard by a Division Bench of the High Court and Lakshmana Rao, J. speaking for the Bench upheld the findings of the learned single Judge to the effect that the 25% marks for interview were excessive. The Bench, however, did not agree with the learned single judge that 50% marks for performance appraisal were excessive. The Division Bench reduced the interview marks from 25% to 15% and increased the marks, regarding length of service above 5 years, from 15% to 25% With these modifications, the division Bench dismissed the writ appeals. The Corporation filed special leave petitions against the judgment of the