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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)

REPORTABLE

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 | |
|EMPLOYEES WELFARE ASSOCIATION & ORS. |…..RESPONDENT(S) |

W I T H
CONTEMPT PETITION (CIVIL) NO. 320 OF 2010
IN
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
A.K. SIKRI, J.
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
reservation.

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
reading:
“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

SUBJECT: RESERVATION FOR THE SCs/STs IN PROMOTION
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.
Sd/-
(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
promoted.”

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
offer.

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
reservation.”
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
Others[4]
“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
follows:

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
service.

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).

(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
work.”

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
otherwise.

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
aspects:
(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
purpose.

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
provided:
“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-
VI.

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
costs.

………………………………………J.
(J. CHELAMESWAR)

………………………………………J.
(A.K. SIKRI)

NEW DELHI;
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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