A promotion policy, issued under the relevant regulations, is binding on the bank and it cannot admit ineligible persons for promotion. Granting exemption to ineligible officers from the obligatory requirements for promotion is arbitrary and discriminatory.

V. SIVARAMAN NAIR, J.

( 1 ) PETITIONERS in these two Writ Petitions are officer employees of the State bank of Hyderabad. They are working in Junior Management Grade Scale-I (for short JMGS-I) with effect from 27-12-1982. They had completed two years or more of service in rural branches which are identified as such by the Bank. They were aspirants of promotion to the next higher scale of Middle Management grade Scale-II (for short MMGS-II) for the years 1989 and 1990. They had completed all other eligibility criteria including one years service as field officer. They complained against their exclusion from appointment in spite of their qualification, eligibility and entitlement, by including names of ineligibles who had not completed the obligatory period of one years service as field officer and/or two years of service in the rural branches, according to the circular no. PER/89-90/43 dt. 28-7-1989 (in W. P. No. 15466/89) and circular No. PER/ 90-91/7dt. 26-4-1990 (inw. P. 8343/90)respectively. Petitioners submit that two years of service in the rural branches and one year s field service are obligatory eligibility criteria in accordance with the guidelines issued by the Government of India, which have been incorporated as part of the adhoc promotion policy and the relevant employment notices issued pursuant thereto by the State Bank of Hyderabad. The respondent Bank however maintains that it had no course open except to grant relaxation in case of employees who were otherwise eligible but could not possess the requisite period of rural service or field service on the relevant dates in 1989 and 1990 due to no fault of theirs. Respondents contend that the two itemsof qualifications, though pre-requisites for promotion, do not form part of the eligibility criteria. In other words, respondents submit that it was not possible to eliminate persons who were otherwise qualified and seniors but could not be posted in rural branches or in the field and therefore were denied opportunity of acquiring those otherwise essential qualifications. Respondent-bank submits that such of the seniors who were otherwise eligible had to be and were promoted with the stipulation that their promotion would be effective only on completion of the obligatory period of rural service. Whether the respondent-bank could have done so overlooking the petitioners who were duly qualified, according to the regulations, the promotion policy and the circulars, is the crux of the controversy involved in these two Writ petitions.

( 2 ) THERE is no controversy as to the status of the State Bank of Hyderabad as a statutory Corporation covered by the State Bank of India (Subsidiary Banks) act, 1957, hereinafter referred to as the Subsidiary Banks Act and the Regulations framed thereunder. It is admitted that the State Bank of Hyderabad (which was then called the Hyderabad Bank) before the enactment of the above Act was governed by the State Bank of Hyderabad Act, 1956. Before and after the enactment of the Subsidiary Banks Act, the State Bank of Hyderabad was a continues to be a statutory Corporation with all characteristics of a state , up article 12 of the Constitution of India. Section 63 of the Subsidiary Banks Act confers power on the State Bank of India to frame Regulations in respect of subsidiary Banks, which include the State Bank of Hyderabad as well. Such regulations may comprehend pay and service conditions of officers and other employees of such banks. Such Regulations are framed from time to time by the state Bank of India in consultation with the Board of Directors of each of the subsidiary Banks. It is also not in dispute that the service conditions of employees are governed by the State Bank of Hyderabad Officers Service regulations, 1979, hereinafter referred to as the service Regulations . Clause 17 of the Regulations empowers the Board of Directors or the Executive committee, to lay down promotion policy from time to time.

( 3 ) THE State Bank of Ind

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