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Thursday, January 15, 2015

rule of reservation of the Scheduled Castes (SC) and Scheduled Tribes (ST) in the promotion in the officer grade/scale in the appellant Banks.= CIVIL APPEAL NO. 209 OF 2015 (arising out of Special Leave Petition (Civil) No. 4385 of 2010) |CHAIRMAN & MANAGING DIRECTOR |.....APPELLANT(S) | |CENTRAL BANK OF INDIA & ORS. | | | VERSUS | | |CENTRAL BANK OF INDIA SC/ST | | |EMPLOYEES WELFARE ASSOCIATION & ORS. |.....RESPONDENT(S)


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                 CIVIL APPEAL NO.    209            OF 2015
      (arising out of Special Leave Petition (Civil) No. 4385 of 2010)

|CHAIRMAN & MANAGING DIRECTOR                     |.....APPELLANT(S)      |
|CENTRAL BANK OF INDIA & ORS.                     |                       |
|   VERSUS                                        |                       |
|CENTRAL BANK OF INDIA SC/ST                      |                       |

                                   W I T H
                  CONTEMPT PETITION (CIVIL) NO. 320 OF 2010
               SPECIAL LEVE PETITION (CIVIL) NO. 5046 OF 2010

                                   W I T H
                   CIVIL APPEAL NO.    210        OF 2015
      (arising out of Special Leave Petition (Civil) No. 4483 of 2010)

                                   W I T H
                   CIVIL APPEAL NO.   211         OF 2015
      (arising out of Special Leave Petition (Civil) No. 5046 of 2010)

                                   W I T H
                   CIVIL APPEAL NO.  212          OF 2015
      (arising out of Special Leave Petition (Civil) No. 6002 of 2010)

                                    A N D
                   CIVIL APPEAL NO.  213          OF 2015
      (arising out of Special Leave Petition (Civil) No. 6125 of 2010)
                               J U D G M E N T

                 Leave granted.  Impleadment and  intervention  applications
are allowed.

The issue which arises for consideration in  these  appeals  lies  within  a
narrow campus and is crisp one, though at the same time  it  is  of  seminal
importance for the parties before us. It relates to the rule of  reservation
of the Scheduled Castes (SC) and Scheduled Tribes (ST) in the  promotion  in
the officer grade/scale in the appellant Banks. There  is  no  dispute  that
the appellant Banks, which are statutory/public sector banks, are  following
the  applicable  guidelines  of  the  Central   Government   pertaining   to
reservation of SC and ST employees insofar as their promotion from  clerical
grade to officer grade is concerned. The question to be answered  is  as  to
whether there  is  any  reservation  in  the  promotions  from  one  officer
grade/scale to  another  grade/scale,  when  such  promotions  are  made  on
selection  basis.  As  per  the  appellant  Banks,  there  is  no  rule   of
reservation for promotion in the  Class  A  (Class-I)  to  the  posts/scales
having basic salary of more than ?5,700/- and in the relevant  instructions,
issued in the form of Office Memoranda, only a  concession  is  provided  in
the manner officers belonging to SC/ST category are  to  be  considered  for
promotion. To put it otherwise, the position taken  by  the  Banks  is  that
there is no rule of reservation for promotions and the candidature of  these
officers belonging to these categories for promotion is to be considered  on
the basis of relaxed standards. The respondents, who  are  SC/ST  Employees'
Unions of the appellant Banks or individuals belonging to  such  categories,
dispute the aforesaid stand taken by  the  Banks.  According  to  them,  the
circular issued by the Central Government  expressly  provides  for  such  a

It is interesting to note that for taking their  respective  positions  both
the  parties  rely  upon  O.M.  dated  13-08-1997  issued  by  the   Central
Government (which, of course, is to  be  read  along  with  other  connected
office memoranda). Thus, outcome of these  appeals  would  depend  upon  the
interpretation that is to be accorded to the said  Office  Memorandum  dated
13-08-1997. As the Banks are in appeal against the judgment  of  High  Court
of Judicature at Madras  rendered  on  09-12-2009  whereby  number  of  writ
appeals were disposed of, it can clearly be discerned that insofar  as  High
Court is concerned its interpretation to the aforesaid circular has gone  in
favour of the SC/ST employees.

Before we revert to the fulcrum of the issue and give  our  answer  thereto,
we deem it apposite  to recapitulate in brief  the  historical  facts  which
have led to the present lis.

As already noted above, the appellant Banks, which are statutory  Banks  and
Public Sector Undertakings, have been following the  reservation  policy  of
the Government of India as issued by the Government from time to  time.  For
doing so,  the  Promotion  Policy  of  each  of  such  bank  makes  specific
provision in this behalf. It is also  a  matter  of  common  knowledge  that
Ministry of Finance, Government of India is the nodal ministry  for  framing
policy  on  reservations  for  financial  institutions/banks.  To  given  an
example, Regulation 1.1 of the promotion policy for  officers  of  UCO  Bank
makes such a provision in the following manner:
"The Promotion policy for officers in the Bank  has  been  designed  in  the
context of the guidelines issued by the Government from time to  time  under
the Officers Service Regulations."

            It will also be relevant to quote  hereunder  Regulation  22  of
the  aforesaid  promotion  policy.  This  Regulation  makes  the   following
"22.  Concession/Relaxations etc  for  SC/ST,  Physically  Handicapped,  Ex-
servicemen and Other categories of officers;

22.1  The guidelines/ directives/ administrative instructions issued by  the
Government of India  from  time  to  time  regarding  relaxation/concession/
reservation etc. for SC/ST, physically handicapped, Ex-serviceman  and  such
other special categories of  officers  in  the  matter  of  scale  to  scale
promotions within the Officers' Grade shall be deemed to be a  part  of  the
policy and given effect to accordingly."

It is an accepted position that identical  promotion  policy  is  framed  by
each of these appellant Banks.

As per the aforesaid promotion policy, incorporating the reservation  policy
framed by the Central Government  in  respect  of  candidates  belonging  to
SC/ST category, the banks are according 15%  reservation  for  SC  and  7.5%
reservation  for  ST  candidates.  It  is  done  at  the  initial  level  of
recruitment  and  also  for  promotion  in  the  clerical  cadre.   Such   a
reservation is also provided  for  promotion  from  clerical  grade  to  the
lowest rank in  the  officers  grade  which  is  commonly  known  as  Junior
Management Grade Scale-I (Scale-I). However,  when  it  comes  to  promotion
from Scale-I to the next scale, which is known as  Middle  Management  Grade
Scale-II (Scale-II), the Banks have not been making any  reservations  while
carrying out these promotions. As per the Banks, it  is  because  of  Office
Memorandum No. 38012/6/83-East(SCT) dated 01-11-1990 issued by the  Ministry
of Personnel, Public Grievance and Pensions  (Department  of  Personnel  and
Training), Government of India clearly stating that there is no  reservation
within Group 'A' posts.

The matter regarding reservations in promotions was  considered  by  a  nine
Judge Bench of this Court in Indra Sawhney v. Union of India[1],  which  was
a judgment rendered on 15-11-1992. The  Court  specifically  held  that  the
reservation under Article 16(4) of the Constitution of India is confined  to
initial appointment and cannot extend  to  reservation  in  the  matters  of
promotion. In order to nullify the effect of the aforesaid dicta, there  was
an amendment to Article 16 by Constitution (Seventy-Seventh  Amendment)  Act
with effect from 17-06-1995. Vide this amendment, after Clause 4, Clause  4A
was inserted in Article 16 of the Constitution, which  was  couched  in  the
following language:
4A.   Nothing in this article  shall  prevent  the  State  from  making  any
provision for reservation in matters of promotion to any  class  or  classes
of posts in the services under the State in favour of the  Scheduled  Castes
and the Scheduled Tribes which,  in  the  opinion  of  the  State,  are  not
adequately represented in the services under the state."

      Clause (4) of Article 16 is worded as follows:
"4.   Nothing in this article  shall  prevent  the  State  from  making  any
provision for the reservation of appointments or  posts  in  favour  of  any
backward class of citizens which, in  the  opinion  of  the  State,  is  not
adequately represented in the services under the State.

            The constitutional position on the insertion  of  Clause  4A  is
that the State is now empowered to make provision for reservation in  matter
of promotions as well, in favour of SC and ST wherever the State is  of  the
opinion that SCs and STs are  not  adequately  represented  in  the  service
under the State. Nevertheless,  it  is  only  an  enabling  provision  which
empowers the State to make any provision  for  reservation  for  SC  and  ST
candidates in the matter of promotion as well.

In  order  to  complete  the  historical  narration  of  facts,  it  becomes
necessary to mention that after the  aforesaid  amendment,  a  question  had
arisen as to whether a person in SC or ST  category,  who  gets  accelerated
promotion because of reservation would also get consequential  seniority  in
the higher post if he  gets  that  promotion  earlier  than  his  senior  in
general category.  The Court answered this question in the case of Union  of
India and Others etc. v. Virpal Singh Chauhan  and  Others[2]  holding  that
such an employee belonging to SC/ST category  on  promotion  would  not  get
consequential seniority and his seniority will  be  governed  by  the  panel
position. This led to another  Constitution  amendment  and  the  Parliament
enacted Constitution (Eighty-Fifth Amendment) Act, 2001  whereby  Clause  4A
of Article 16 was amended. The amended Clause 4A reads as under:
"4A.  Nothing in this article  shall  prevent  the  State  from  making  any
provision  for  reservation  in  matters  of  promotion  with  consequential
seniority to any class or classes of posts in the services under  the  State
in favour of the Scheduled Castes and the Scheduled  Tribes  which,  in  the
opinion of the State, are not adequately represented in the  services  under
the State."

The constitutional position, as it stands now,  in  view  of  the  aforesaid
amendment, is that such SC/ST candidates who get the benefit of  accelerated
promotion are provided consequential  seniority  as  well.  This  amendment,
thus, nullifies the effect of the judgment of this  Court  in  Virpal  Singh
Chauhan (supra). Another significant aspect which is to  be  noted  is  that
this amendment was made retrospectively from 17.06.1995, i.e.  the  date  of
coming into force the original Clause 4A of Article 16.

Constitutional validity of Clause 4A of Article 16  as  well  as  Clause  4B
which  was  also  amended  vide  Eighty-Fifth  Constitution  Amendment,  was
challenged before this Court and this challenge was repelled in the case  of
M.  Nagaraj  and  others  v.  Union  of  India  and  Others[3].  The   Court
specifically held  that  these  provisions  flow  from  Article  16(4)  and,
therefore do not alter the structure of Article 16(4). Further, they do  not
obliterate any of the constitutional requirement, namely, ceiling  limit  of
50% (quantitative limitation), the  concept  of  creamy  layer  (qualitative
exclusion), the sub-classification  between  OBCs,  on  the  one  hand,  and
SCs/STs on the other hand, as held in Indra Sawhney (supra). The  Court,  at
the same time, made it clear that the ceiling limit of 50%, the  concept  of
creamy layer and the compelling reasons,  namely,  backwardness,  inadequacy
of  representation   and   overall   administrative   efficiency   are   the
constitutional requirements without  which  the  structure  of  equality  of
opportunity in Article 16 would collapse.

After the amendment in Article 16 of the  Constitution,  with  incorporation
of Clause 4A therein, the  Government  of  India  issued  Office  Memorandum
dated 13-08-1997  as  the  interpretation  of  this  O.M.  is  the  bone  of
contention.  As  the  outcome  of  these  appeals  largely  depends  on  the
interpretation of this Memorandum, we feel apposite to  reproduce  the  said
O.M. dated 13-08-1997 in toto:
                      "No. 36012/18/95-Esst(Res.) Pt:II
                             GOVERNMENT OF INDIA
Ministry of Personnel Public, Grievances and Pensions, Department of
Personnel and Training

                                                      North Block, New Delhi
                                                 Dated the 13th August, 1997

                              OFFICE MEMORANDUM

             The  undersigned  is  directed  to  invite  attention  to  this
Department's OM No.  36012/37/93-Esst.  (SCT)  dated  19.8.1993   clarifying
that the Supreme Court had,  in  the  Indira  Sawhney  case,  permitted  the
reservation for the Scheduled Castes and Scheduled Tribes, in promotion,  to
continue for a period of five years from 16.11.1992.

2.    Consequent to the Judgment in Indira Sawhney's case  the  Constitution
was amended by the Constitution (Seventy seventh Amendment)  Act,  1995  and
Article 16(4A) was incorporated in the Constitution.  This  article  enables
the State to provide for reservation in matters of promotion, in  favour  of
the Scheduled Castes and the Scheduled Tribes, which in the opinion  of  the
State are not adequately represented in the Services under the State.

3.    In pursuance of Article 16(4A), it has been decided  to  continue  the
Reservation in promotion as at present, for the  Scheduled  Castes  and  the
Scheduled Tribes in the services/posts under the Central  Government  beyond
15.11.1997 till such time as the representation of each  of  the  above  two
categories in each cadre reaches the prescribed percentages  of  reservation
whereafter, the reservation in promotion  shall  continue  to  maintain  the
representation  to  the  extent  of  the  prescribed  percentages  for   the
respective categories.

4.    All  Ministries/Department  are  requested  to  urgently  bring  these
instructions to the notice of  all  their  attached/subordinate  offices  as
also the Public Sector Undertakings and Statutory Bodies etc.
                                                              (Y.G. PARANDE)
                                                     Director (Reservation)"
Impugned Judgment
The respondents Associations representing SC  and  ST  employees  had  filed
writ petitions in the High Court of  Madras  submitting  that  in  spite  of
there being a clear policy  of  reservation  even  for  promotion  from  one
category of officer to the higher category of officers, the appellant  Banks
had not been making any provision for such reservations while  carrying  out
the promotions. Mandamus was sought seeking directions against the  Bank  to
specify such reservation to SC/ST officers as per the promotion  policy  for
officers. The learned Single Judge of the  High  Court  dismissed  the  writ
petitions holding that Article 16(4A) was only an enabling  provision  which
permits the State to make provisions for reservation insofar  as  promotions
are concerned. However, in the instant case, no such provision was made.  No
material was produced by the writ petitioners which  could  demonstrate  any
such specific provision for promotion.

The writ petitioners challenged said order by  filing  writ  appeals  before
the Division Bench. The Division Bench has taken a contrary view. A  perusal
of the judgment of the Division Bench would spell out that it  has  gone  by
the spirit behind Articles 15 and 16 of the Constitution which  are  in  the
nature of affirmative actions that can be taken by the  State  in  providing
reservations for the socially and educationally  backward  people  and  that
includes SC and ST classes.  It  has  pointed  out  that  Article  16(4)  is
specifically designed to give a due share in the State power  to  those  who
have remained out of it mainly on  account  of  their  social,  educational,
economic backwardness as reservation affords  such  classes  of  citizens  a
golden opportunity to serve the  nation  and  thus  gain  security,  status,
comparative affluence and influence in decision making process. It was  with
this spirit  in  mind   Clause  4A  was  inserted  introducing  an  enabling
provision for providing reservation in the matter of promotion as well.  The
High Court thereafter took note of the statistics that was placed on  record
to show the strength of SC/ST officers in  various  grades/scales/cadres  in
respect of UCO Bank as well as Central Bank of India and  found  that  there
was hardly any  representation  in  the  higher  scales,  what  to  talk  of
adequate representation. The figures given in respect  of  Central  Bank  of
India are noted in para 22 of the impugned judgment, stating as under:
"22. ......A consolidated statement for the promotions from  the  year  1997
to 2008 in MMG:III-IV:, SMG: IV-V; SMG V-VI; TMG VI-TMG VII would  depict  a
bleak picture regarding the entire aspect since  least  or  no  presentation
for SC/ST could be seen glaringly. As per these calculations for  the  total
promotions of 20 posts, only one SC candidate  got  promotion  in  the  year
2007 and for a total promotions of 171, within these  categories  only  nine
SC candidates got promotion. In promotions effected for the years  1997  and
2002, respectively for 19 posts  and  six  posts,  no  SC/ST  candidate  was
offered promotion. In the year 1999, for a total number of 126  posts,  only
one SC candidate was given promotion. Likewise, for a whopping 308  numbered
of promotions in the  year  2006  a  meager  36  candidates  of  SC/ST  were

      The Court also noticed almost identical feature  in  UCO  Bank  giving
the following details :
"23.  .......As  per the scale wise representation of SC/ST officers  as  on
31.3.2008 in the UCO Bank, in Scale IV posts there is a short fall of 50  SC
officers and 31 ST officers in Scale V posts, there is a short  fall  of  10
SC officers and 7 ST officers; in Scale VI, there is a short fall  of  5  SC
officers and 2 ST officers and in Scale VII posts, there is a short fall  of
3 SC officers and one ST officer."

Office Memorandum dated 13-08-1997  has  been  read  in  the  light  of  the
aforesaid constitutional spirit as  well  as  inadequate  representation  of
SC/ST category officers in the Banks holding that the mandate  of  the  said
O.M. was to provide for reservation.

While holding so, the High Court also repelled the contention of  the  Banks
predicated on Article 335 of the Constitution on the basis of which  it  was
contended that introduction  of  rule  of  reservation  in  promotion  would
reduce the efficiency of administration of  Banks.  The  Court  specifically
took note of Constitution Eighty-Second Amendment which was  made  effective
from 08-09-2000 and provides that nothing in this Article shall  prevent  in
making any provision in favour of the members of the  Scheduled  Castes  and
Scheduled Tribes for relaxation in qualifying marks in  any  examination  or
lowering  the  standards  of  evaluation,  for  reservation  in  matters  of
promotion to any class or classes of services or posts  in  connection  with
the affairs of the Union or of a State. In the opinion of  the  High  Court,
when Constitution has given such extra protection to  the  under  privileged
communities so  as  to  enjoy  equal  opportunities  as  guaranteed  by  the
Constitution, the Banks are  not  justified  in  sleeping  over  the  matter
providing reservations in promotions for a decade with no  good  reasons  to

The position taken by both the parties remains the same before us  as  well.
According to the Banks, vide O.M. dated 13-08-1997 "it has been  decided  to
continue the reservation in promotion  as  at  present,  for  the  Scheduled
Castes and the Scheduled Tribes in the  services/posts...........".  It  is,
thus, argued that this O.M. did not make any reservation in  the  matter  of
promotion but whatever was existing earlier has been  continued.  M/s.  C.S.
Vaidyanathan and Raju Ramachandran, learned  Senior  Advocates,  who  argued
for these Banks laid strong emphasis on the aforesaid language  employed  in
the O.M. and  submitted  that  only  existing  position  continued  and  the
position which was existing was that there was  no  specific  provision  for
reservation. The only provision which existed was  judging  the  candidature
of SC/ST candidates for promotion in Class A (Class I) service drawing  more
than basic salary of ?5,700/-, to apply relaxed standards. It was  submitted
that such a provision existed in O.M. dated 01-11-1990. It was pointed  that
in para 2 of this O.M. a mention was made about the concession which was  to
be given to the officers belonging to these categories and in para 3 it  was
amply clarified that there is no  reservation  in  promotion  by  selection.
Paras 2and 3 of O.M. dated  01-11-1990 read as under:

"2.   Though in the OM cited above it has been  clearly  mentioned  that  in
promotion by selection within Class I (now Group A) to posts which carry  an
ultimate salary of Rs. 2000/- per month or less (since revised to Rs. 5700/-
) the Scheduled Castes and Scheduled Tribes will be given concession  namely
"those scheduled Castes and Scheduled Tribes who are senior  enough  in  the
zone of consideration for promotion  so  as  to  be  within  the  number  of
vacancies for which select list has to be drawn up,  would  be  included  in
that list provided they are not  considered  unfit  for  promotion",  doubts
have been expressed in certain quarters as to whether the  concession  given
herein above is a reservation or a concession.

3.    It is hereby clarified that in promotion by selection within  group  A
posts which carry an  ultimate  salary  of  Rs.  5700/-  p.m.  there  is  no

It was argued that a  conjoint  reading  of  the  aforesaid  two  circulars,
namely, O.M.  dated  01-11-1990  and  13-08-1997  would  manifest  that  the
provision was made for concession and  not  reservation  in  the  matter  of
promotion. Reliance  was  placed  on  two  judgments  of  this  Court  where
distinction between concession and reservation is explained lucidly:
      (i)   National Federation of S.B.I. and Others v. Union of  India  and
"15. In 1987, the Government of India  issued  the  7th  Edn.  of  the  said
Brochure in which para 9.2, corresponding to the one quoted above, reads  as

MHA OM No. 1/9/69. Estt.(SCT) dated 26-3-70 and Deptt. of Personnel & AR  OM
No. 1/10/74-Estt.(SCT) dated 23-12-1974

"9.2 Promotion by selection method.-  (a)  Promotions  by  selection  within
Group A (Class-I).

In promotions by selection to posts within Group A (Class I) which carry  an
ultimate salary of Rs 2000 per month, or less, (Rs 2250 per  month  or  less
in the revised scale) there is no reservation, but the Scheduled Castes  and
Scheduled  Tribes  officers,  who  are  senior  enough  in   the   zone   of
consideration for promotion so as to be within the number of  vacancies  for
which the select list has been drawn up, would  be  included  in  that  list
provided they are not considered unfit for promotion. Their position in  the
select list would,  however,  be  the  same  as  assigned  to  them  by  the
Departmental Promotion Committee on the basis of their  record  of  service.
They would not be given for  this  purpose,  one  grading  higher  than  the
grading otherwise assignable to  them  on  the  basis  of  their  record  of

In order to improve the chances of Scheduled  Castes  and  Scheduled  Tribes
officers for selection to the higher categories of posts in Group  A  (Class

(i)  Scheduled  Castes/Scheduled  Tribes  officers  in  Group  A  (Class  I)
Services/Posts should be provided with more opportunities for  institutional
training and for attending  seminars/symposia/conferences.  Advantage  would
also be taken of the  training  facilities  available  at  the  Lal  Bahadur
Shastri National  Academy  of  Administration,  Mussoorie,  National  Police
Academy, Hyderabad, Indian Institute of Public  Administration,  New  Delhi,
the Administrative Staff College, Hyderabad etc. and
(ii) It would be  the  special  responsibility  of  the  immediate  superior
officers of the Scheduled Castes/Scheduled Tribes officers  in  Class  I  to
give advice and guidance to the latter  to  improve  the  quality  of  their

                                      xx   xx    xx

19. We are unable to agree with the learned counsel. It is admitted  on  all
hands that so far as promotions within Class I are concerned  -  with  which
alone the Memorandum dated 26-3-1970 deals - there  are  no  orders  of  the
Government of India applying the  rule  of  reservation.  We  have  referred
hereinbefore to the  earlier  Memorandum  dated  11-7-1968  (which  in  turn
refers  to  a  yet  earlier  Memorandum  dated  8-11-1963).  Those   earlier
Memorandums provide for reservation in Classes II, III and IV  but  not  for
promotion to Class I and not at any rate to promotions within Class  I.  Nor
does the Memorandum dated 26-3-1970 provide for such reservation.  The  idea
is self-evident. While the rule of reservation is  made  applicable  to  the
lower categories, viz., Classes II, III and IV (to the extent  specified  in
the said Memorandums), no such reservation  was  thought  advisable  in  the
matter of promotions within Class I. Instead of  reservation,  a  concession
was provided, the concession explained hereinabove. It is  this  fact  which
has been reiterated, affirmed and clarified in  the  subsequent  letters  of
the Finance Ministry. It is thus clear that the letters of the  Ministry  of
Finance dated [pic]30-5-1981 and the subsequent ones do not amend or  modify
the Office Memorandum dated 26-3-1970  but  merely  explain  it.  They  make
explicit what is implicit in it. So is the rendering of para 9.2 in the  7th
Edn. in the Brochure. What all they say is  that  the  rule  of  reservation
does not apply to promotions within Class I (i.e., promotions to be made  on
the basis of selection to posts which carry an ultimate salary  of  Rs  2250
per month or less in the revised scale) but a concession in terms of para  2
of the Memorandum dated 26-3-1970 is provided in  that  behalf.  It  cannot,
therefore, be said that either the letters of the  Ministry  of  Finance  or
the rendering of para 9.2 in the 7th Edn. of the  Brochure  is  inconsistent
with the Memorandum dated 26-3-1970 or that they are contrary to the  orders
of the Government.

                                      xx   xx    xx

31. For the above reasons, we hold  that  in  the  matter  of  promotion  by
selection to posts within Class I which carry an ultimate salary of Rs  2250
in the revised scale of pay per month or less, there is  no  reservation  in
favour of Scheduled Castes/Scheduled Tribes but they  are  entitled  to  the
concession contained in para 2 of  the  Office  Memorandum  dated  26-3-1970
issued by the Ministry  of  Home  Affairs.  The  concession  is  that  those
Scheduled Castes/Scheduled Tribes officers who  are  senior  enough  in  the
zone of consideration for promotion  so  as  to  be  within  the  number  of
vacancies for which the select list has to be drawn up will be  included  in
the select list provided they are not considered unfit for promotion.  (This
rule has been [pic]explained in the  body  of  the  judgment  by  giving  an
illustration, which it is not necessary to repeat  here.)  The  position  of
such candidates included in the select list would, however, be the  same  as
is assigned to them by the Departmental Promotion Committee on the basis  of
their record of service. The said candidates would not be entitled, for  the
purpose  of  the  said  selection,  one  grading  higher  than  the  grading
otherwise assignable to them on the basis of their record of  service.  This
is also the purport of para 9 of the  Brochure  insofar  as  it  deals  with
promotions within Class I."

      (ii)  Pragjyotish Gaonlia Bank  (Now  known  as  Assam  Gramin  Vikash
Bank) and Another v. Brijlal Dass[5]

"24. Having carefully considered the  submissions  made  on  behalf  of  the
respective parties, we  are  inclined  to  agree  with  Mr  Mehta  that  the
provision relating to reservation posts extracted hereinabove, contained  in
the Circular dated 10-6-1997, has been wrongly interpreted by  the  Division
Bench of the  High  Court.  The  said  condition  is  in  the  nature  of  a
concession as was contemplated in the Circular dated  9-11-1994,  issued  by
NABARD in order to give an opportunity to a  Scheduled  Caste  or  Scheduled
Tribe candidate to be automatically appointed, if he came within the  number
of vacancies [pic]available. It was a concession to enable such a  candidate
to avoid the process of selection,  which  all  the  other  candidates  were
required to undergo.

25. The said provision has been very elaborately explained by a  three-Judge
Bench of this Court in National Federation of SBI v. Union of India;  (1995)
3 SCC 532 . As has  been  explained  in  the  said  judgment,  the  zone  of
consideration is  the  list  of  selected  candidates  chosen  in  order  of
seniority to be considered for the  purpose  of  filling  up  the  available
vacancies and merely by coming within the zone of consideration a  Scheduled
Caste or Scheduled Tribe  candidate  would  not  be  entitled  to  automatic
selection. The concession relating to reservation does not mean that any  of
the vacant posts were required to be kept reserved for such Scheduled  Caste
or Scheduled Tribe candidate. It is only when such a candidate  came  within
the number of vacancies that  such  a  concession  would  be  applicable  to
him/her for appointment without going through the selection process.

Learned counsel appearing  for  respondents,  including  Dr.  Krishan  Singh
Chauhan, Mr. E.C. Vidya Sagar, Mr. A. Subba Rao, Mr.Satyajit  A.  Desai  and
Mr. C.K. Chandrasekhar, Advocates, placed strong  reliance  on  the  reasons
given by the High Court in support of its verdict  projecting  dismal  state
of affairs virtually  no  representation  of  the  SC/ST  employees  in  the
officers category, particularly, scale IV and above.

It was also argued by these respondents that after the impugned judgment  of
the Division Bench allowing writ appeals of  these  respondents,  on  14-01-
2010 and 01-02-2010, the Union Government had  directed  the  implementation
of  the  impugned  High  Court  judgment.  The  Bank  has  filed  the   SLP,
thereafter. Their present stand that there will be no reservation  but  only
concession by considering officers who are senior enough to  be  within  the
zone and are not declared unfit, is misleading. In fact, a Bill  was  passed
in both the Houses of the Parliament by the  previous  Government  to  grant
reservations  in  promotions  at  all  levels,  (i.e.  117th  Constitutional
Amendment), which had lapsed subsequently. It  was  argued  that  the  Union
Government cannot take a different stand now.

The claim of the Banks that grant of reservation in promotion  from  Scale-I
level onwards would affect efficiency, was also refuted by  contending  that
the officers belonging to SC/ST have been promoted  only  on  the  basis  of
their own merit/performance.  It was submitted that  the  State  cannot  act
contrary to Constitutional provisions. It was submitted  that  the  decision
dated 10-03-1995 in National Federation of S.B.I. (supra) and relied by  the
Banks related to pre-77th Amendment, which came to be passed on  17-06-1995.
 As per them, the decision in M. Nagaraj (supra) answers the  issues  raised
by the Banks.  Pointed reference was  made  to  the  117th  Amendment  Bill,
which was taken judicial notice of  in  Himachal  Pradesh  Scheduled  Tribes
Employees  Federation  and  another  v.  Himachal  Pradesh   Samanaya   Varg
Karamchari Kalayan Mahasangh and others[6].  Attention was  drawn  to  paras
32 to 34 of the said judgment, which are as under:
"32. Here, we would like to allude to the words of Lord Denning,  in  Rondel
v. Worsley (1967) 1 QB 443 about the conduct expected of an advocate:

"... As an advocate he is a minister of justice equally with the Judge.  ...
I say 'all he honourably can' because his duty is not only  to  his  client.
He has a duty to the court which is paramount. It is a  mistake  to  suppose
that he is the mouthpiece of his client to say what he wants:  or  his  tool
to do what he directs. He is none of these things. He owes allegiance  to  a
higher cause. It is the cause of truth and justice. He must not  consciously
misstate the facts. He must not knowingly conceal the  truth.  He  must  not
unjustly make a charge of fraud, that is, without evidence  to  support  it.
He must produce all the relevant authorities, even those  that  are  against
him. He must see  that  his  client  discloses,  if  ordered,  the  relevant
documents, even those that are fatal to his  case.  He  must  disregard  the
most specific instructions of his client, if they conflicts  with  his  duty
to the court. The code which requires a barrister to do all this  is  not  a
code of law. It is the code of honour." (QB p. 502)

                                                         (emphasis supplied)

[pic]In our  opinion,  the  aforesaid  dicta  of  Lord  Denning  is  an  apt
exposition of the very high standard  of  moral,  ethical  and  professional
conduct expected to be maintained by the members  of  legal  profession.  We
expect no less of an advocate/counsel in this country.

33. Here, in this case, on 26-4-2010 a statement was made on behalf  of  the
State of H.P. that "the State intends to collect more  details  with  regard
to representation of the SCs/STs and to pass  appropriate  orders  within  a
reasonable time i.e. approximately within three months after collecting  the
necessary details and datas". Having  very  deftly  avoided  a  decision  on
merits in SLP (C) No. 30143 of 2009, the State has totally  failed  to  live
up to the solemn statement made to this Court. It has hedged and hemmed  and
prevaricated from 26-4-2010 till date. In spite of the requisite data  being
available, the policy of reservation already adopted by the  State  has  not
been implemented. We, therefore, do  not  agree  with  Dr  Dhavan  that  the
applicants are seeking a mandamus to adopt a  policy  in  reservation.  From
the above narration, it is evident that the applicants  want  the  State  to
implement its own decisions. The prayer is:

"Direct the respondent/State Government to decide  the  case  in  time-bound
manner on the basis of data already available/submitted to the Cabinet  Sub-
Committee on 25-4-2011 within a period of one month and;
Further direct stay on all promotions pending decision taken in this case."

34. The final excuse offered by the State for  not  granting  the  aforesaid
relief  is  that  the  State  now  awaits  the  finalisation  of  the  117th
Constitution Amendment. We decline to accept the  reasons  put  forward  for
not honouring the statement solemnly made to this Court on  26-4-2010.  This
Court has been more than considerate to the requests made by the  State  for
extension of time. This last excuse about awaiting the finalisation  of  the
proposed Hundred-seventeenth  Constitutional  Amendment  is  the  proverbial
last straw on the camel's  back.  As  stated  earlier,  the  proposed  117th
Constitutional Amendment would not adversely affect the merits of  the  clam
(sic)  of  the  petitioner  for  grant  of  promotion   with   consequential
seniority. By the aforesaid proposed  Amendment,  the  existing  Article  16
clause (4-A) is to be substituted by the following clause (4-A)-

"16.   (4-A)   Notwithstanding   anything   contained   elsewhere   in   the
Constitution, the Scheduled Castes and the Scheduled Tribes  notified  under
Article 341 and Article 342, respectively, shall be deemed  to  be  backward
and nothing in this article or in Article 335 shall prevent the  State  from
making  any  provision  for  reservation  in  matters  of  promotions,  with
consequential seniority, to any class or classes of posts  in  the  services
under the State in favour of the Scheduled Castes and the  Scheduled  Tribes
to the extent of the percentage of reservation  provided  to  the  Scheduled
Castes and the Scheduled Tribes in the services of the State."

Much reliance was also placed on a recent decision  of  this  Court  in  the
case Rohtas Bhankhar and Others v. Union of India  and  Another[7],  on  the
basis of which it was contended that the reliance of the Banks in that  case
on O.M. dated 22.07.1997 was totally misplaced  as,  inasmuch  as,  in  this
case the said O.M. is held to be bad in law as per the discussion  contained
in the following  paragraphs:
"9. We are in respectful agreement with the decision in  UT,  Chandigarh  v.
Kuldeep Singh, (1997) 9 SCC 199  and approve the same. Ordinarily, we  would
have sent the matter to the regular Bench for disposal of  the  matters  but
having regard to the nature of controversy and the  fact  that  the  Central
Administrative Tribunal, Delhi (for short "the Tribunal")  has  followed  S.
Vinod Kumar v. Union of India, (1996) 6 SCC 580 which is not  good  law  and
resultantly the 1997 OM is also illegal, in  our  view,  the  agony  of  the
appellants need not be prolonged as they are entitled to the reliefs.

10. Consequently, the civil appeals are allowed. The impugned order  is  set
aside. The 1997 OM is declared illegal.  The  respondents  are  directed  to
modify the results in the Section Officers/ Stenographers (Grade B/Grade  I)
Limited  Departmental  Competitive  Examination,  1996  by   providing   for
reservation and extend all consequential reliefs to the appellants,  if  not
granted so far. No costs."

Before discussing the main issue involved, it would be  in  the  fitness  of
things to iron out some of the  creases  surrounding  the  main  issue.   In
fact, this exercise would facilitate understanding the precise tenor of  the
issue that needs to be addressed and answered.

In the first instance, we make it clear that there is no dispute  about  the
constitutional position envisaged in Articles 15 and 16,  insofar  as  these
provisions empower the State to take affirmative action in favour  of  SC/ST
category persons by making reservations for them in the  employment  in  the
Union or the State (or for that matter, public sector/authorities which  are
treated as State under  Article  12  of  the  Constitution).   The  laudable
objective underlying these provisions is also  to  be  kept  in  mind  while
undertaking  any  exercise  pertaining  to  the  issues  touching  upon  the
reservation of such SC/ST employees.  Further, such a  reservation  can  not
only be made at the entry  level  but  is  permissible  in  the  matters  of
promotions as wells.  At the same time, it is also to be borne in mind  that
Clauses 4 and 4A of Article 16 of the Constitution  are  only  the  enabling
provisions which permit the State  to  make  provision  for  reservation  of
these category of persons.  Insofar as making of provisions for  reservation
in matters of promotion to any class or classes of post is  concerned,  such
a provision can be made in favour of SC/ST category  employees  if,  in  the
opinion of the State, they are not adequately represented in services  under
the State.  Thus, no doubt, power lies with the State to make  a  provision,
but, at the same time, courts cannot issue any  mandamus  to  the  State  to
necessarily make such a provision.  It is for the State to act, in  a  given
situation, and to take such an  affirmative  action.   Of  course,  whenever
there exists such a provision for reservation in the matters of  recruitment
or the promotion, it would bestow an enforceable right in favour of  persons
belonging to SC/ST category and on failure on the part of any  authority  to
reserve the posts, while making selections/promotions, the beneficiaries  of
these provisions can approach the Court to get their rights enforced.   What
is to be highlighted is that existence of provision for reservation  in  the
matter of selection or promotion, as the case may be, is the  sine  qua  non
for seeking mandamus as it is only when such a  provision  is  made  by  the
State,  a  right  shall  accrue  in  favour  of  SC/ST  candidates  and  not

It is  not  in  dispute  that  the  rule  of  reservation  is  followed  for
promotions from clerical grade to the lowest  rank  in  the  officer  grade.
The question,  however,  is  as  to  whether  there  is  any  provision  for
reservation when promotion from a particular rank in the  officer  grade  is
to be made to the next rank in the  said  grade,  namely,  from  Scale-I  to
Scale-II, Scale-II to Scale-III and so on.

While considering this question, we have to keep in  mind  that  reservation
policy of the Central Government is applicable to the appellant  Banks.   It
is the common case of both the parties.  In fact, as  already  noted  above,
there is a specific provision to  this  effect  in  the  promotion  policies
framed by the appellant Banks.

Next thing which is to be kept in mind is  the  two  office  memoranda,  one
dated 1.11.1990 and the other dated 13.8.1997, which are referred to by  the
counsel for the parties.  We  have  already  reproduced  the  aforesaid  two
office  memoranda.   Insofar  as,  Office  Memorandum  dated  1.11.1990   is
concerned, a bare reading of this provision would reflect the following  two
(a)   In promotion by selection within Class-I  (Group-A)  post,  the  SC/ST
candidates are to be given 'concession'.
(b)   This concession is available to those SC/ST employees who  are  senior
enough in the zone of consideration for promotion so as  to  be  within  the
number of vacancies for which select list has to be drawn up.
            Thus, first requirement is that such SC/ST candidates  who  come
within the zone of consideration for  promotion  are  senior  enough  to  be
within the number of vacancies.  Once they come within  the  aforesaid  zone
of consideration, they have to be included in the list,  provided  they  are
not considered unfit for promotion.  It clearly follows from the above  that
once they come under the zone of consideration for promotion  so  as  to  be
within the number of vacancies for which select list has  to  be  drawn  up,
for such SC/ST employees the only embargo to deprive them  of  promotion  is
when they are found unfit for promotion.   For  other  officers  in  general
category, depending upon the rule of promotion, there may be  much  stricter
criteria based on comparative merit or selection by  merit,  etc.   However,
in case of such senior enough SC/ST candidates, the criteria appears  to  be
seniority, subject to fitness.
      (c)   This  OM  specifically  clears  the  doubt  that  the  aforesaid
provision is only a concession  and  not  reservation  in  favour  of  SC/ST
candidates, inasmuch as  para  3  of  the  OM  states  that  "It  is  hereby
clarified that in promotion by selection within Group-A  post,  which  carry
ultimate salary of ? 5,700/- per month, there is  no  reservation".   It  is
clear from the above that insofar as Office Memorandum  dated  1.11.1990  is
concerned, there was no provision for reservation made in  favour  of  SC/ST
candidates in promotion  by  selection  within  Group-A  posts  carrying  an
ultimate salary of ?5,700 per month.

No doubt, this Office Memorandum was issued in the year 1990, that  is  much
before amendment in Article 16 of the Constitution, which  was  carried  out
in the year 1995 by inserting Clause 4A. However,  as  already  pointed  out
above, Clause 4A is an enabling provision which empowers the State  to  make
reservations in the matter of promotions as  well  as  in  favour  of  SC/ST
employees. There was no such provision  till  1.11.1990  in  the  matter  of
promotion by selection within Group-A post which carry  an  ultimate  salary
of ?5,700/- per month.

Having understood this, we come to Office Memoradum dated 13.8.1997 to  find
out as to whether this Memorandum makes any provision  for  reservations  in
the matter of promotion in favour of SC/ST employees, inasmuch as  no  other
Office Memorandum or Circular or Rule, etc. is produced on record  for  this

We have already noted above that a nine Judge Bench decision of  this  Court
in Indra Sawhney (supra) held that Clause 4 of Article  16  does  not  cover
the cases  of  promotion,  meaning  thereby,  as  per  the  said  clause  no
reservation in favour of SC/ST  persons  in  the  matter  of  promotions  is
permissible.  It is to  nullify  the  effect  of  this  dicta  in  the  said
judgment that Clause  4A  was  inserted  in  Article  16  by  Constitution's
Seventy-Seventh Amendment with effect from 17-06-1995.  However, it is  also
a matter of record that in Indra Sawhney's  case  (supra),  this  Court  had
also clarified that reservation for SC/STs in promotion would  continue  for
a period of five years from 16-11-1992.  What it meant was that if there  is
a  provision  of   reservation   made   in   the   matter   of   promotions,
notwithstanding the dicta in the said case that such a  reservation  is  not
permissible, those provisions were allowed to continue for a period of  five
years from  16-11-1992.   Thereafter,  before  the  expiry  of  five  years,
constitutional provision was incorporated  in  the  form  of  Clause  4A  by
making provision for reservation  in  the  matter  of  promotions  as  well.
These facts are taken note of in first two paras of Office Memorandum  dated
13-08-1997.  Thereafter, in the 3rd para  of  the  said  Memorandum,  it  is
"3.  In pursuance of Article 16(4A), it has been  decided  to  continue  the
Reservation in promotion as at present, for the  Scheduled  Castes  and  the
Scheduled Tribes in the services/posts under the Central  Government  beyond
15.11.1997 till such time as the representation of each  of  the  above  two
categories in each cadre reaches the prescribed percentages  of  reservation
whereafter, the reservation in promotion  shall  continue  to  maintain  the
representation  to  the  extent  of  the  prescribed  percentages  for   the
respective categories."

What is decided is to continue  the  reservation  in  promotion,  which  was
prevalent at that time, for the SC/ST employees, which was  to  continue  in
terms of the judgment of this Court in Indra  Sawhney  (supra)  till  15-11-
1997, even beyond 15-11-1997, till such time as the representation  of  each
of  the  above  two  categories  in  each  cadre  reaches   the   prescribed
percentages of reservation whereof.  It is, thus, crystal clear from a  bare
reading of this para that the existing provision relating to reservation  in
promotion was allowed to continue beyond 15-11-1997.  Thus, this  Memorandum
did not make any new provision for reservation in  promotion  in  favour  of
SC/ST employees.

We have already noticed above that in matters of  promotion  within  Group-A
posts, which carry an ultimate salary of ?5,700/- per month,  there  was  no
provision for any reservation.  On a conjoint reading of  these  two  Office
Memorandums, in the absence of any other provision or Rule  evidencing  such
a reservation in the matter of promotions, it cannot be said that there  was
reservation in promotion within Group-A posts upto the  ultimate  salary  of
?5,700/- per month.  The High Court in the impugned  judgment  has  gone  by
the lofty ideals enshrined in Articles 15 and  16  of  the  Constitution  as
well as the fact that in these Banks there is no adequate representation  of
SC/ST category of officers in Group-IV and above.  That may be so.   It  can
only provide justification for making a provision of this nature.   However,
in the absence of such a provision, same cannot be  read  by  overstretching
the language of Office Memorandum dated 13-08-1997.  It is for the State  to
take stock of the ground realities and take a decision as to whether  it  is
necessary to make provision for reservation in promotions to  the  aforesaid
post as well.

Having said so, one other aspect which has to be  necessarily  addressed  to
at this stage calls for our attention.  This aspect, which we are  going  to
point out now, has been totally glossed over by the learned Single Judge  as
well as the Division Bench of the High Court in their respective judgments.

It  is  provided  in  Office  Memorandum  dated  01-11-1970,  and  we   have
repeatedly stated above, that  there  is  no  reservation  in  promotion  by
selection within only those Group-A posts which carry an ultimate salary  of
?5,700/- per month.  In such cases, it is only concession that applies.   We
have accepted the contention of the appellant Banks in this behalf,  as  per
the discussion contained hereinabove.  Significantly, what follows  is  that
reservation is provided in promotion by  selection  qua  those  posts  which
carry an ultimate salary of less than ?5,700/- per month (pre-revised).

The Department of Public Enterprises had issued an Office  Memorandum  dated
08-11-2004 as to the salary limit of ?5,700/- mentioned for the purposes  of
reservation as ?18,300/- (5th Central Pay Commission) and  in  the  case  of
Public Sector Undertakings who are following Industrial  Dearness  Allowance
(IDA) pattern, the monetary ceiling was  fixed  as  ?20,800/-  (from  01-01-
1996, i.e. 5th Central Pay Commission).  The said pay  ceiling  is  achieved
in the appellant Banks  only  when  an  officer  reaches  Scale-VII.   As  a
fortiorari, the policy of no reservation  in  the  matter  of  promotion  is
applicable only from Scale-VII and above.  It,  therefore,  clearly  follows
that insofar as promotion from Scale-I to Scale-II, Scale-II  to  Scale-III,
Scale-III  to  Scale-IV,  Scale-IV  to  Scale-V,  Scale-V  to  Scale-VI  are
concerned, reservation is to be provided.  The appellant  Banks,  therefore,
cannot take umbrage under the aforesaid Memorandum and deny  reservation  in
favour of SC/ST employees while carrying out promotions upto to Scale-VI.

Upshot of the aforesaid discussion would be to allow these  appeals  partly.
While setting aside the impugned judgment of the High Court  to  the  extent
it holds that Office Memorandum  dated  13-08-1997  makes  a  provision  for
reservation, it is clarified that at  present  there  is  no  provision  for
reservation in promotion by selection only in respect of those  posts  which
carry an ultimate salary of ?5,700/- per month (revised to ?18,300/- by  5th
Central Pay Commission and ?20,800/- per month in respect  of  those  Public
Sector Undertakings following  IDA  pattern).   Qua  appellant  Banks,  that
would be in respect  of  Scale-VII  and  above.   Therefore,  to  carry  out
promotions from Scale-I upwards upto Scale-VI, reservation in  promotion  in
favour of SC/ST employees has to be given.  It  would  have  the  effect  of
allowing the writ petitions filed  by  the  respondents/unions  partly  with
directions to the appellant Banks to make provision for  reservations  while
carrying out promotions from Scale-I to to Scale-II and upward  upto  Scale-

In view of the above, Contempt Petition (Civil) No. 320 of 2010 is  disposed
of with directions to the appellant Banks to carry  out  the  promotions  by
adopting the procedure mentioned in this judgment.

In the peculiar facts of this case, we leave the parties to bear  their  own

                                                            (J. CHELAMESWAR)

                                                                (A.K. SIKRI)

JANUARY 09, 2015.

[1]   (1992) Supp 3 SCC 217
[2]   (1995) 6 SCC 684
[3]   (2006) 8 SCC 212
[4]   (1995) 3 SCC 532
[5]   (2009) 3 SCC 323
[6]   (2013) 10 SCC 308
[7]   (2014) 8 SCC 872

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