Judgment

VENKATARAMIAH, JJ.

( 1 ) THE State Bank of India and two of its officers have filed this appeal by special leave against the judgment of a Division Bench of the High Court of Andhra Pradesh in Writ Appeal No. 1027 of 1986 dated 25-9-1986 affirming the judgment dated 28-3-1986 of the learned single Judge in Writ Petition No. 5133 of 1984 issuing a direction to the appellants to promote the respondent, Mohd. Mynuddin to the Middle Management Grade Scale Ill.

( 2 ) THE respondent who was holding the post of the Manager, S. I. B. Division, State Bank of India, Vijayawada (Andhra Pradesh) which was a post in Middle Management Grade Scale II filed the above writ petition before the High Court in the year 1984 complaining that he has been wrongly denied promotion to the Middle Management Grade Scale III along with some others who belonged to his batch without any reasonable ground, even. though he was fully eligible for such promotion. On the above basis he prayed for the issue of a direction to the management to promote him to the higher post with effect from 1979. According to the appellants his case was not considered in the year 1979 on account, of inadequacy of material regarding his eligibility but when it was brought to the notice of the management that he had necessary eligibility for the post, his case was considered in 1982 for the vacancies of 1980 and 1981 but he was not selected. Again his case for promotion was considered on 13-8-1983. Then again he was found not fit for promotion and, therefore, he was not promoted.

( 3 ) THE main contention of the respondent before the High Court was that since there were no adverse remarks in any of his confidential reports, he should have been promoted to the higher post. The learned single Judge noticed that in the confidential reports relating to the respondent it had been recorded that his service was satisfactory in the years 1977-78, 1979-80 and 1980-81 and that there were no adverse remarks against the respondent. The learned single Judge, therefore, found that on the material placed before the Court there was nothing which disentitled the respondent to the promotion in question and that the action of the management in not promoting him was arbitrary. The learned single Judge accordingly allowed the writ petition and issued a direction to the appellants to promote the respondent to the post of Middle Management Grade Scale Ill with effect from 1-8-1979 when his batch mates were promoted and that he should be given all consequential benefits. Aggrieved by the judgment of the learned single Judge the appellants filed an appeal before the Division Bench of the High Court which, as stated earlier, dismissed the appeal affirming the judgment of the learned single Judge by its order dated 25-9-1986 against which this appeal by special leave is filed.

( 4 ) IT is admitted that the posts in the Middle Management Grade Scale III in the State Bank of India are posts to which appointments are made by selection. The State Bank of India stated before the High Court that the promotion to Middle Management Grade Scale III posts depended not merely upon the eligibility but on merit and such promotion was accorded only after a proper evaluation of the service records, performance appraisal and potentiality of the officer concerned to assume higher responsibilities. The evaluation was done by the Selection Committee, which was expected to go into several aspects including the merits and demerits of all the candidates who were eligible. It was further pleaded that the mere absence of adverse remarks did not entitle an employee to promotion to the next higher grade automatically when promotion was by selection. It was further pleaded that after applying the relevant tests laid down by several circulars issued by the management embodying the guidelines in respect of the selection of officers for promotion to the Middle Management Grade Scale III it was found from time to time that the respo