SRI JAGATHIGOWDA C.N. AND ORS. versus CHAIRMAN, CAUVERY GRAMINA BANK AND ORS.

Citation: [1996] SUPP. 4 S.C.R. 190 · Decided: 31-07-1996 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
SRI JAGATHIGOWDA C.N. AND ORS. 
v. 
CHAIRMAN, CAUVERY GRAMINA BANK AND ORS. 
JULY 31, 1996 
B 
(KULDIP SINGH AND S. SAGH!R AHMED, JJ.) 
Se1vice Law : 
Regional Rural Banks Act, 1976-Guide/ines issued by NABARD-
C Proniotions to the post to Senior Managers-Selection based on con1parative 
pe1fo11nance of respective candidates in Bank-On tlze basis of guidelines 
issued-Held, cannot be set aside unless it is shoivn to be arbitra1y. 
The Cauvery Gramina Bank, Mysore, a rural Bank sponsored by the 
State Bank of Mysore was established in 1976 under the Regional Rural 
D Banks Act, 1976. The NABARD which was esiablished in 1986 with a view 
to look after the agricultural and rural development in the country issued 
various circulars between 1984 and 1986 providing guidelines for promo-
tions/appointments in the rural banks to the posts of Senior Manager/Area 
Managers and General Managers. The circular issued in April 1986 indi-
E cated that a Director's committee shall be constituted for effecting promo-
tions, and the selection of the eligible candidates should be based on 
performance of respective candidates to the Bank. The Bank issued its own 
guidelines in July 1986, based on circulars issued by NABARD and called 
for eligible officers to the post of Senior Manager and constituted a 
Director's Committee. In the interview, marks were awarded according to 
F 
the performance appraisal for:ns. 
The Respondents-unsuccessful employees of the rural Bank 
preferred writ petitions before the Single Judge of the Karnataka High 
Court for quashing the promotions to the post of Senior Managers. The 
respondents contended that the procedure adopted by the Director's Com-
G mittee was in violation of the guidelines issued by NABARD; and that the 
promotions were not made on the basis of seniority-cum-merit but by way 
of selection on the basis of interview held by the Committee constituted by 
the Banks. The Single Judge allowed the writ petition and quashed the 
promotions holding that the Bank violated the guidelines of the NABARD 
H issued in the year 1984 and that the guidelines issued in 1986 by NABARD 
190 
JAGATIHGOWDA C.N. v. CHAIRMAN, CAUVER Y GRAMINA BANK 191 
were not applicable to promotions in the cadre of Senior Managers. The A 
appeal filed by Appellants were dismissed on the ground that the service 
record of recent past should have been taken into consideration and in 
case there was nothing adverse against an officer he could not be denied 
on the ground that some other officer junior to him was more meritorious. 
The Division Bench held that the promotions were made on the basis of B 
selection in as much as marks were assigned on the basis of performance 
appraisal and interview. 
Allowing the Appeal, this Court 
HELD : l. The Single Judge as also the Division Bench of the High C 
Court fell into patent error in quashing the promotions made by the Bank. 
(195-D] 
2. The 1986 guidelines issued by NABARD are applicable to all the 
employees of the rural Banks. The High Court fell into patent error in 
holding that the guidelines were not applicable to the impugned promo- D 
!ions. [195-E] 
3. TI1e cumulative reading of the two guidelines issued by NABARD 
clearly shows that the promotions were to be made on the basis of the 
comparative assessment of the performance appraisal of th,. Officers 
concerned as has been done by the Director's committee of the Bank. The E 
instructions of the NABARD being in the nature of guidelines the promo-
tions made by the Bank cannot be set aside unless the same are arbitrary. 
[195-E-FJ 
4. The High Court was not justified in holding that the performance 
appraisal could not be taken into consideration by the Director's Commit-
F 
tee while considering the Officers for promotion to the higher rank. The 
promotions made by the Bank are upheld in so far as the Appellants and 
other similarly situated persons are concerned. [195-H; 196-A-B] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9891 of 
1996. 
CJ 
From the Judgment and Order dated 5.2.92 of the Karnataka High 
Court in W.A. No. 1854 of 1991. 
Ashish Dholakia, Tripurari Ray for Vineet Kumar for the Appel-
lants. 
H 
192 
SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R. 
A 
M.L. Verma, S.N. Bhat, (S.K. Kulkarni} for M.T. George and M.M. 
B 
Kashyap for the Respondents. 
The Judgment of the Court was delivered by 
KULDIP SINGH, J. Special leave granted. 
A learned single Judge of the Karnataka High Court allowed the 
bunc

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