T. Govindan & Ors. v. State Industries Promotion Corporation of Tamil Nadu & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 05.01.2009CORAM:THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVANANDTHE HONOURABLE MR.JUSTICE K.K.SASIDHARANW.A.NOS.226 to 228 of 2006 andW.A.M.P. No.373 of 2007T. Govindan .. Appellant in W.A.Nos.226 & 228 of 2006S. Kaliyamoorthy.. Appellant in W.A.No.227 of 2006-Vs.-1. State Industries Promotion Corporation of Tamil Nadu, rep. by its Managing Director, No.19-A, Rukumani Lakshmipathy Road, Egmore, Chennai – 8...Ist Respondent in all petitions2. K. Shanmugasundaram3. K.S. Gunasekaran4. K. Maruthiah5. D. Ramani.. Respondents 2 to 5 in W.A.No.226 & 228/06Prayer:- Writ Appeals against the common order dated 26.7.2005 inW.A.NOs. 8983 ,7718 & and 8984 of 1998 on the file of this court.WP.No.8983/98 :Writ petition filed under Article 226 of the Constitution of Indiato issue a Writ of Certiorari calling for the records relating to theimpugned circular issued by the first respondent in No.E3/Misc/201/97dated 03.06.1998, quash the same.WP.No.7718/98 :Writ petition under Article 226 of the Constitution of India toissue a Writ of Certiorarified Mandamus to call for the recordsconnected with the impugned circular dated 03.06.1998, ref.No.E3/Misc/201/97, on the file of the respondent, and quash the same andconsequently direct the respondent to asscess merit of the eligiblecandidates for promotion to the post of Assistant Managers only on the https://hcservices.ecourts.gov.in/hcservices/ basis of the confidential repairs and service record available with therespondent.WP.No.8984/98 :Writ Petition under Article 226 of the Constitution of India toissue a Writ of Certiorarified Mandamus calling for the records relatingto the impugned proceedings of the first respondent in No.E3/Misc/201/97dated 17.06.1998 quash the same to direct the respondent to promote thepetitioner as Assistant Manager with retrospective benefits based uponthe petitioners past service.For Appellants: Mr.V.SelvarajFor Respondents: NA COMMON JUDGMENT (Judgment of the Court was delivered by K.K.SASIDHARAN, J)These three writ appeals are directed against the common orderdated 26.7.2005 in W.P.Nos.7718, 8983 and 8984 of 1998 whereby thelearned Single Judge negatived the challenge made by the petitioners tothe circular issued by the first respondent on 3.6.1998 prescribing theprocedure for assessment of merits for the purpose of promotion to thepost of Assistant Manager in the State Industries Promotion Corporationof Tamil Nadu.Background facts:2. Since the factual matrix involved in all the three writpetitions are similar in nature, the averments as found in W.P.No.8983and 8984 of 1998 are taken to narrate the background facts.3. The appellant in Writ Appeal Nos.226 and 228 of 2006 (Petitionerin W.P.No.8983 and 8984 of 1998) was appointed as Junior Assistant inthe first respondent Corporation in 1982. Subsequently, he was promotedas Assistant in 1985 and he was granted a further promotion as AssistantOfficer on 15.7.1998. The next avenue of promotion was in the post ofAssistant Manager. As per the service regulations, promotion to thepost of Assistant Manager was from the cadre of Assistant Officer and toqualify for such promotion, an employee should have completed five yearsof service as Assistant Officer. As per Rule 3.12 of the Service Rules,the criteria for promotion to the post of Assistant Manager was meritand seniority would be considered only when merit was approximatelyequal. However there was no guideline as to how the merit has to beassessed and all along promotion from the cadre from Assistant Officerto Assistant Manager and other posts have been made on the basis of theservice records alone. https://hcservices.ecourts.gov.in/hcservices/

4. While so, the first respondent issued the impugned circulardated 3.6.1998 whereby the Corporation evolved a procedure forassessment of merits and as per the said procedure the candidate has toappear for the written test and interview, for consideration of his casefor promotion to the post of Assistant Manager from the cadre ofAssistant Officer. There were fourteen Assistant Officers, who werequalified for promotion as Assistant Managers and there were only fiveposts of Assistant Managers. In pursuance of the said circular, thefirst appellant appeared for the written test and interview but he wasnot selected and respondents 2 to 5 were selected. However theappellant in W.A.No.227 of 2006 did not appear for the writtenexamination as well as subsequent interview though he was also qualifiedfor promotion to the post of Assistant Manager.5. Subsequent to the finalisation of the promotion list theappellants filed writ petitions challenging the circular dated 3.6.1998as well as the promotion list published by the first respondent on17.6.1998 promoting respondents 2 to 5 as Assistant Mangers in theCorporation.6. The grievance of the appellants in the writ petitions appear tobe the issue of circular for the first time for the purpose ofassessment of relative merits of candidates for promotion to the postof Assistant Manager. According to the appellants, it was for the firsttime that such a circular was issued and the said circular has beenissued by the Managing Director without the authorisation of theChairman of the Corporation. It was their contention that a procedurehas already been prescribed under Rule 3.12 and as such the ManagingDirector has no power to amend the service rules and introduce writtentest and oral interview as the method for assessment of the relativemerits of the candidates. It was further contended that the appellantshave got a clean record of service and as such they should have beenpromoted as Assistant Managers on the basis of the service records.According to them all along, the Corporation had been makingpromotions on the basis of service records and as such the firstrespondent was incompetent to issue the circular, which had the effectof amending the statutory rules. In the said factual premises, theappellants prayed for quashing the impugned circular dated 3.6.1998 aswell as the select list published by the first respondent.7. In the counter affidavit filed on behalf of the first respondentthey have contended that, knowing fully well that such a circular wasissued for the purpose of assessment of the relative merits of thecandidates, the petitioner in W.P.Nos.8983 and 8984 of 1998 took part inthe written test as well as interview and having found that he was notselected, he has chosen to challenge the circular. It was furthercontended that the appointing authority for the post of AssistantManager was only the Managing Director and it was decided that in order https://hcservices.ecourts.gov.in/hcservices/ to assess the merits of the eligible Assistant Officers for promotion tothe post of Assistant Manager, a Committee should be constituted tointerview the candidates. The interview was considered essential sincethe post of Assistant Manager was in the managerial cadre in theCorporation and the promotees should have adequate knowledge to carryout the duties attached to the said post. The Board of Directors of thefirst respondent Corporation at its meeting held on 27.5.1998 took noteof the constitution of the committee to assess the merits of thecandidates for promotion to the higher post in the Corporation and itwas suggested that two more outside members with reputation for highintegrity should be included in the Committee and a written test mayalso be prescribed for internal candidates to assess their skill andaptitude. Accordingly the selection committee was constituted with theChairman, Managing Director of the Corporation, Additional Director ofIndustries and Commerce and Joint Director, Finance Department of theGovernment of Tamil Nadu and it was only to implement the decision takenby the Board of Directors that the impugned circular was issued callingupon the eligible Assistant Officers to appear for the written test andsubsequent interview for assessing their suitability for promotion tothe post of Assistant Manager. The first respondent has also denied theallegation that the impugned circular was not sanctioned by theChairman and they have also contended that the circular was issued onlyas per the decision of the Corporation. The first respondent alsojustified the selection and according to them a fair procedure wasadopted by the Corporation for assessing the merits of the candidates.Disposal of Writ Petitions:8. The learned Single Judge found that as per Rule 3.12 of theService Rules of the first respondent Corporation, the basic criteriafor promotion was prescribed to be one of merit and seniority would betaken into consideration only when merit was approximately equal andopined that the holding of written test by constituting a committee forthe said purpose cannot be held to be violative of Rule 3.12 of theService Rules. Accordingly the learned Single Judge held thatholding of written test would definitely enable the concernedauthorities to make a better assessment of the individual merits of thecandidates for the purpose of promotion and as such the impugnedcircular was only by way of supplementing the rule prescribed forpromotion and dismissed the writ petitions. Challenging the said order,the petitioners have come up with the present appeals.Submissions:-9. Thiru V.Selvaraj, learned counsel for the appellants contendedthat the impugned circular dated 3.6.1988 was clearly in violation ofthe procedure contemplated under Rule 3.12 of the Service Rules inasmuchas the first respondent was not having the authority to change the modeof selection by way of a circular and without amending the service https://hcservices.ecourts.gov.in/hcservices/ rules. It was his further contention that all along the firstrespondent has been assessing the merits on the basis of personalrecords of the concerned employee and for the first time, during therelevant year they have come up with the circular only to deny promotionto the candidates like the appellants, for the reasons best known to thefirst respondent. The learned counsel also submitted that theappellants have got a very clean record and the same would be evidentfrom the good entries made by the higher officials of the firstrespondent Corporation and as such the first respondent should havefollowed the earlier practice of giving promotion by assessing the meriton the basis of entries in the service records.Circular – Whether supplementary to the rules:-10. The first respondent has framed their service regulations andas per Rule 3.12, the basic criteria for promotion is merit andseniority would be taken into consideration only when merit wasapproximately equal. It was also provided that the guidelines issued bythe Government should be observed in the matter of promotion. Eventhough the eligible criteria was prescribed as merit and seniority wasonly secondary, no guidelines were framed as to the manner in which themerit has to be assessed for the purpose of promotion. It is theadmitted case of the parties that no guidelines were framed earlier andthe Corporation was following the procedure of assessment on merits onthe basis of service records. However the management was of the viewthat there should be a clear guideline to assess the relative merits ofthe employees for the purpose of grant of promotion and the same was allthe more necessary in the case of promotion to the managerial cadre.The post involved in the present matter is that of Assistant Manager,which admittedly is a managerial cadre. Therefore the Corporation took apolicy decision to conduct written test as well as oral interview forthe purpose of assessment of the relative merits or otherwise of theemployees. The circular was issued in pursuance of the decision of theBoard as found from the counter affidavit filed by the Corporation. Theimpugned circular is only a supplementary to the service rules and thesame is not in contravention of the rules. Admittedly theconsideration for promotion is only merit and the guidelines prescribesthe mode and method by which merit has to be assessed by theCorporation. Therefore it cannot be said that the circular has no legalsanction or that the same was issued in variance of the statutory rulesas contained in Rule 3.12 of the service rules.11. In order to consider the relative merits of the employees, somany factors would be taken into consideration by the employer. In casethe service rules provides the factors to be taken note of fordetermining the merit, the employer was expected to assess the merits inaccordance with those rules. However in case where there was no suchguidelines provided in the service regulations, the Selection Committeewas required to adopt a rationale procedure or method or criteria which https://hcservices.ecourts.gov.in/hcservices/ is reasonable and fair for the purpose of assessment of merit. Theseniority is only one among such factors, which would be taken intoconsideration for promotion. It was only in the event of the merits ofthe candidates being equal, that the seniority has got a play in thematter of promotion, unless otherwise provided in the service rules.12. Even though the service regulations provides that promotionshall be only on merit, there was no indication in the said rule as tohow the merit has to be assessed. It was only for the said purpose forevolving a specified procedure that the impugned circular was issued bythe Corporation. By no stretch of imagination, it can be said that thecircular had the effect of nullifying the statutory regulations and infact it was not in conflict with the procedure already laid down in theservice regulations.13. The learned counsel for the appellants vehemently contendedthat the impugned circular was at variance with the statutory rules andas such the first respondent was clearly in error in relying on thesaid circular for grant of promotion to the respondents 2 to 5. A closescrutiny of the rules and circular clearly shows that the circular wasonly explanatory in nature and it indicates only the method to befollowed by the Corporation for assessment of merit.Promotion – A management function:-14. The Honourable Supreme Court in K.SAMANTARAY v. NATIONALINSURANCE COMPANY LTD., [JT 2003 (Suppl.1) SC 14] indicated that it waswithin the province of the management to evolve a fair procedure andadjudging the claims of different employees for the purpose of promotionand made the legal position thus:-"While laying down the promotion policyor rule, it is always open to the employer tospecify area and parameter of weightage to begiven in respect of merit and seniorityseparately so long as policy is notcolourable exercise of power, or has theeffect of violating of any statutorily scopeof interference and other relatable. Thedecision in B.V.Sivaiah case (supa) isclearly distinguishable on facts and in law.That was a case where statutory rulesgoverned the field. This Court, inter alia,held that fixing terms which are at variancewith the statutory rules is impermissible. Inthe case on hand, prior to the formulation ofpolicy in February, 1`990, there were nocodified prescriptions. It was the stand ofthe respondent-employer that prior to theformulation of the policy, certain https://hcservices.ecourts.gov.in/hcservices/ guidelines existed and the objectives of thepolicy were to rationalize and codify theexisting guidelines relating to promotionswithin officers cadre. There is no statutoryrule operating. It is for the employer tostipulate the criteria for promotion, thesame pertaining really to the area of policymaking. It was, therefore, permissible forthe respondent to have their own criteria foradjudging claims on the principle ofseniority-cum-merit giving primacy to meritas well, depending upon the class, categoryand nature of posts in the hierarchy ofadministration and the requirements ofefficiency for such posts. " 15. In Andhra Bank v. B. Satyanarayana,(2004) 2 SCC 657, theSupreme Court reiterated the legal position that the employer isentitled to take a policy decision to fix the criteria for grant ofpromotion in the following words:-"11. It is a well-settled principle ofservice jurisprudence that the employer isentitled to lay down policy decision layingdown the criteria for grant of promotion to itsofficers. The eligibility norms for suchpromotions must be defined by the bank on arealistic basis wherefor a system to choose thebest-available talent to man the criticalpositions is to be devised. Once a power vestsin an authority by reason of the provisions ofa statute, it is trite that such power can beexercised from time to time. Changes arerequired to be made keeping in view therequirement of the management as also theexigency of the situation obtaining at therelevant time."16. In a recent decision reported in 2008(9) SCC 243 (UNION OFINDIA v. PUSHPA RANI), the Honourable Supreme Court considered theauthority of the employer to prescribe the method of recruitment and thelack of expertise in the Court to suggest the manner and method ofstructuring or re-structuring the cadres or for evaluation of the meritsof the candidates and observed thus:"Before parting with this aspect of thecase, we consider it necessary to reiterate thesettled legal position that matters relating tocreation and abolition of posts, formation andstructuring/ restructuring of cadres https://hcservices.ecourts.gov.in/hcservices/ prescribing the source/mode of recruitment andqualifications, criteria of selection,evaluation of service records of the employeesfall within the exclusive domain of theemployer. What steps should be taken forimproving efficiency of the administration isalso the preserve of the employer. The power ofjudicial review can be exercised in suchmatters only if it is shown that the action ofthe employer is contrary to any constitutionalor statutory provision or is patently arbitraryor is vitiated due to mala fides. The courtcannot sit in appeal over the judgment of theemployer and ordain that a particular post befilled by direct recruitment or promotion or bytransfer. The court has no role in determiningthe methodology of recruitment or laying downthe criteria of selection. It is also not opento the court to make comparative evaluation ofthe merit of the candidates. The court cannotsuggest the manner in which the employer shouldstructure or restructure the cadres for thepurpose of improving efficiency ofadministration."Challenge to the Selection Procedure by unsuccessful candidates –whether permissible:17. The appellant in W.A.Nos.226 and 228 of 2006 took part in theselection process knowing fully well that his claim for promotion wouldbe decided only in accordance with the procedure prescribed as per theimpugned circular dated 3.6.1998. It was only when he found that hisperformance in the written test as well as oral interview was notsatisfactory and that respondents 2 to 5 came out successfully in theselection process that he has chosen to challenge the circular. It isnot permissible for a candidate, who had undergone the selection processon the basis of a given procedure, to challenge the selection proceduresubsequent to the conclusion of the process. The first appellant hadsubmitted to the jurisdiction of the Selection Board and his merit wassubjected to the assessment. Therefore he is estopped from challengingthe selection process at a later point of time.18. In Madan Lal v. State of J&K, (1995) 3 SCC 486, the HonourableSupreme Court held that a candidate, who appeared for the selection isestopped from challenging the selection process after the finalisationof the process and observed thus:-"9. Before dealing with this contention, wemust keep in view the salient fact that the https://hcservices.ecourts.gov.in/hcservices/ petitioners as well as the contestingsuccessful candidates being respondentsconcerned herein, were all found eligible inthe light of marks obtained in the writtentest, to be eligible to be called for oralinterview. Up to this stage there is nodispute between the parties. The petitionersalso appeared at the oral interview conductedby the Members concerned of the Commissionwho interviewed the petitioners as well asthe contesting respondents concerned. Thusthe petitioners took a chance to getthemselves selected at the said oralinterview. Only because they did not findthemselves to have emerged successful as aresult of their combined performance both atwritten test and oral interview, they havefiled this petition. It is now well settledthat if a candidate takes a calculated chanceand appears at the interview, then, onlybecause the result of the interview is notpalatable to him, he cannot turn round andsubsequently contend that the process ofinterview was unfair or the SelectionCommittee was not properly constituted. Inthe case of Om Prakash Shukla v. AkhileshKumar Shukla1 it has been clearly laid down bya Bench of three learned Judges of this Courtthat when the petitioner appeared at theexamination without protest and when he foundthat he would not succeed in examination hefiled a petition challenging the saidexamination, the High Court should not havegranted any relief to such a petitioner."19. In Chandra Prakash Tiwari v. Shakuntala Shukla,(2002) 6 SCC127 the Honourable Supreme Court after considering an earlier decisionin Om Prakash Shukla v. Akhilesh Kumar Shukla (1986 Supp SCC 285) heldthus:-"34. There is thus no doubt that whilequestion of any estoppel by conduct wouldnot arise in the contextual facts but thelaw seems to be well settled that in theevent a candidate appears at the interviewand participates therein, only because theresult of the interview is not “palatable”to him, he cannot turn round andsubsequently contend that the process of https://hcservices.ecourts.gov.in/hcservices/ interview was unfair or there was somelacuna in the process."20. The appellants have no case that the selection process wasvitiated on account of favouritism or malafides and in fact no act ofmalafides were alleged against the Selection Board. Therefore it cannotalso be said that the selection was tainted with malafides.Scope of Judicial Review:-21. It is trite that judicial review is very limited in the matterof grant of promotion as the same is essentially a managerial functionand the assessment of relative merits of the employees have to be leftto the management. The Court is mainly concerned with the decisionmaking process. While exercising the power of judicial review, theCourt is not expected to undertake a review of the assessment made bythe Expert Committee and to substitute its views in the place of theCommittee. However things would be different in case it was demonstratedthat the claim of a particular employee was negatived on extraneousreasons and the entire action was tainted with malafides and theemployee was subject to an act of victimisation. In such cases, itwould be possible for the Courts and Tribunals to consider such acts ofmalafides and to render its findings. Even then it is not within theprovince of the Courts and Tribunals to declare the promotion of theaggrieved employee. The proper course would be to set aside the impugnedorder of promotion and to direct the authorities to undertake a freshexercise in the light of the findings rendered and observation made bythe Court.To sum up:22. The learned Single Judge was perfectly correct in hisconclusion that the circular dated 3.6.1998 was issued only as asupplementary to the regulation as prescribed under Rule 3.12 and thatthe conduct of written test would definitely enable the authorities tomake a better assessment of the individual merits of the candidates forthe purpose of promotion. Therefore we do not find any merit in thecontention of the appellants.23. In the result, the writ appeals are dismissed. Consequently,the connected WAMP is closed. No costs.Sd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ Tr/To1. The Managing Director, State Industries Promotion Corporation of Tamil Nadu, No.19-A, Rukumani Lakshmipathy Road, Egmore, Chennai – 8.1 cc To Mr.V.Selvaraj, Advocate, SR.719.W.A.NOs.226 to 228 OF 2006 & CONNECTED WAMP. KJI(CO)RVL 30.01.2009